Panetta's confirmation comes on the eve of the much-awaited announcement of President Barack Obama, on the drawdown of troops from Afghanistan.
Welcoming Panetta's confirmation, US Senators exuded confidence that the new Defence Secretary would be able to lead the armed forces in the critical time of substantial budgetary cuts and when the war in Afghanistan has entered one of the most important phases in the last decade.
"Director Panetta will bring a reassuring level of continuity and in-depth experience, since he has been a critical member of President Obama's national security team during his tenure as Director of the Central Intelligence Agency.
"The Department of Defence will need Director Panetta's skill and wisdom to navigate the extraordinarily complex set of challenges in the years ahead," Senator Carl Levin said.
Panetta will have to struggle with the competing demands on US forces while Washington struggles with an extremely challenging fiscal environment, he said.
"I am certainly hopeful that, as Secretary of Defence, Director Panetta will successfully lead the effort to find and eliminate Ayman al-Zawahiri, who we are told has assumed leadership of al-Qaeda, and other al-Qaeda leaders.
"Zawahiri is a sworn enemy of the United States and our way of life and, like bin Laden, must be dealt with in similar terms," said Senator John McCain, a top Republican leader.
"As Director of the CIA, Panetta has demonstrated he possesses the experience and ability to ensure that we achieve our objectives in the three conflicts in which US forces are now engaged: Iraq, Afghanistan, and Libya," McCain said.
Senate Majority Leader, Harry Reid, said Panetta had all the skills to excel at the difficult job of maintaining the "world's greatest fighting force".
"In this time of tight budgets, he knows how to do more with less," he said.
"At a time when we are reconsidering our strategy in Afghanistan and when events are changing rapidly in the Middle East, we need a Secretary of Defence who has the proven ability to adapt to new situations and re-think our military preparedness at a time when resources are scarce.
"I look forward to working closely with Leon Panetta to ensure a strong and secure America in the 21st Century," said Senator Robert Menendez.