Mr Philippe's appointment ticks several boxes for the 39-year-old Mr Macron, France's youngest president, who took power on Sunday.
Edouard Philippe, 46, a politician and mayor of port city Le Havre, is from the moderate wing of the main centre-right The Republicans party and will be a counterweight to former Socialist MPs who have joined Mr Macron's cause.
Philippe previously worked as a director of public affairs for French nuclear group Areva and as a lawyer with New York City-based worldwide law firm Debevoise and Plimpton LLP, The New York Times reported.
Merkel welcomed Macron's victory over Le Pen, saying he carried "the hopes of millions of French people and also many in Germany and across Europe".
Christophe Castaner, Macron's campaign spokesman, said on Sunday this was the kind of tough choice that would have to be made in Macron's inner circle now that the battle for the presidential Elysee Palace was won.
Merkel has praised Macron's embrace of European unity but has offered few concrete details about the way forward for German-French relations.
Germany was also ready to partner with France in seeking more cooperation in defence policy and a more coherent European foreign policy that could "make Europe more visible" and stronger, she said.
Philippe won out to some other, perhaps more politically aligned, potential nominees, including former Socialist Richard Ferrand, who has been a loyal supporter of Macron since he established his independent movement a year ago.
Speaking at the side of the German leader, Macron said that they need to work on "deep reforms that are necessary and need common work".
But Macron notably wants more support from other European Union countries for French military operations against Islamic extremists in Syria, Iraq and Africa's Sahel region.
Philippe's nomination also expresses Macron's strategy to go beyond the traditional right vs left divide, and to split the centre-right Republicans party - to which Philippe belongs - ahead of next month's legislative elections.
Mayor of Le Havre, his home town, since 2010, the German-speaking father of three, who writes crime novels in his spare time, was elected to parliament in 2012.
Emmanuel Macron is beginning on Monday his first day as French President, with picking a Prime Minister and later travelling to Germany to meet Chancellor Angela Merkel, the media reported.
The move is part of Macron's plan to win support from the Republicans. The outcome of the upcoming election will show if Emmanuel Macron will enjoy a parliamentary majority in the next five years to implement his political program.
Among names being bandied around for the top job in Macron's first government, speculation mostly centered on Edouard Philippe.