Qatar-based Haniyeh, who was killed last week in Tehran in an assassination blamed on Israel, had been Hamas's face on the international stage and was widely seen as a moderate voice in the militant group.
Israel has not confirmed or denied any role in the killing. a
Sinwar, by contrast, is viewed as a hardliner and has not been seen in public during the 10-month war in Gaza, playing a direct role in the conflict as Hamas's overall leader in Gaza.
The selection by Hamas following discussions in Qatar comes as the region braces itself for an expected coordinated attack on Israel by Iran and its regional proxies in response to Haniyeh's killing.
Why was Sinwar selected?
Sinwar was serving four life terms for the killing of two Israeli soldiers when he was released from Israeli jail in 2011.
He then became a senior commander in the Ezzedine al-Qassam Brigades, the military wing of Hamas, before taking leadership of the movement in Gaza in 2017.
Middle East expert James Dorsey called the selection of Sinwar a "statement of defiance", with Hamas showing it intends to remain "in control" of the Gaza Strip despite Israel's objective of eradicating the group.
A senior Hamas official told AFP the selection of Sinwar sent a message that the militant group "continues its path of resistance".
Hugh Lovatt, a Middle East expert at the European Council on Foreign Relations, said the killing of Haniyeh -- a moderate who had "reoriented Hamas towards Arab states" -- had "influenced the internal balance of power" towards Sinwar, who has closer ties to Iran.
Lovatt said Sinwar's selection raised the question of "how much influence did the Iranians and Hezbollah... exert behind the scenes?"
Tahani Mustafa, an analyst with the International Crisis Group, said Sinwar's selection was a "deliberate message from the movement that if Israel insists on being hardline -- Israel is literally killing their moderates -- then they can equally be as hardline and uncompromising".
Will he change the ceasefire negotiations?
Doha-based Haniyeh had acted as Hamas's main interlocutor with Qatari mediators in months of back-and-forth talks aimed at securing a ceasefire in Gaza.
Qatar has hosted Hamas's political office since 2012 with the blessing of the United States.
Speaking to Al Jazeera, Hamas official Osama Hamdan said Sinwar had always been close to the negotiations and "present in their details", explaining that following his selection the "negotiation process will continue".
Dorsey explained while Haniyeh had been negotiating, Sinwar, on the ground, decided "if hostages get released and who gets released". He explained, "now all of that has been unified in one person".
"I don't think there's any doubt that Hamas wants a ceasefire," Dorsey said.
Lovatt said Hamas's agreement to a one-week pause in fighting in November when scores of Israeli and foreign hostages were released in exchange for Palestinian prisoners, "would not have happened unless Sinwar accepted".
"I wouldn't see Sinwar as fundamentally and forever opposed to a ceasefire deal with Israel, but it is clear that he is likely to drive a harder bargain," he added.
Mustafa said Hamas "still want a ceasefire, but it's just about not being willing to capitulate and agree to the terms of one side and not have any of their demands met".
What might Sinwar mean for Hamas's future?
Hamdan said Sinwar's selection illustrated Hamas was "fully aware of the nature of the battle it is waging, asserting "the policy of assassinations practised by the enemy against our leadership... will not succeed".
Lovatt said the assassination of Haniyeh had "thrown Hamas's political configuration momentarily into disarray and because of the urgency of coming up with a leader, this was a moment that benefited the hardliners".
He said moderates in Hamas had already been "in a weakened position for some time now" with "the killing of Haniyeh... a fatal blow to them".
Lovatt said under Sinwar, Hamas would continue "to prioritise armed struggle as the only strategic option going forward for the foreseeable future" with a "further blurring of the line" between its military wing and political leadership as well as "clearly moving closer to Iran".
Dorsey said in recent Israeli and Palestinian history, the two sides were often "mirror images of each other" and "within those mirror images hardliners, wittingly or unwittingly, strengthened hardliners on the other side".
