Retired judge Anthony Hart is to chair the North's official inquiry into the abuse of children living in residential care back to 1945.
Organisations who ran the institutions will face pressure to explain the treatment of young people over the course of five decades.
They could include Catholic religious orders, state and voluntary groups. There will be an acknowledgement forum for victims to tell their stories and an inquisitorial investigation of evidence and questioning of witnesses.
First Minister Peter Robinson said: "We are very pleased that Sir Anthony Hart has agreed to lead this inquiry and we know that he will be unflinching in his pursuit of the truth and scrupulous in his analysis of the evidence."
The inquiry is expected to begin its work in the autumn and will report in approximately three years' time.
Its findings and recommendations will then be considered by Stormont's ministerial Executive, which will decide the way forward.
The inquiry will assess whether there were systemic failings by the state or institutions in their duties towards children under 18 for whom they provided residential care between 1945 and 1995.
Mr Robinson added: "Many people have called for this inquiry. I am confident that the scope and nature of this process is robust, will provide a thorough examination of what happened and will get to the truth."
The appointment of art follows lengthy judicial examinations of claims of abuse in the Republic.
Deputy First Minister Martin McGuinness said the inquiry will include a confidential "acknowledgement forum" in which victims and survivors can recount their childhood experiences in institutions.
Beverley Clarke, Norah Gibbons, Dave Marshall QPM, and Tom Shaw CBE will be forum panel members. Each has unique personal experience of investigating child abuse.
Mr McGuinness said: "They will listen to and acknowledge the testimony of victims and their work will result in a report about the children's experiences."
He added: "We will introduce legislation shortly to ensure that the inquiry has the powers, flexibility and protections it needs to complete its work."
Victims of abuse have been campaigning for an independent and powerful probe with the power to compel witnesses to attend for several years.
Thousands of people signed the Justice for the Victims of Institutional Abuse in Northern Ireland petition, which led to MLAs backing a motion calling for an assessment of the scale of abuse.
The Ryan Report in the Republic, took submissions from 2,000 people who said they had suffered physical and sexual abuse while in the care of Catholic-run institutions in Ireland.
The report found church leaders knew sexual abuse was endemic in boys' institutions.
SDLP Assembly Member Conall McDevitt said: "Today is a significant milestone for sufferers of institutional abuse and I wish him the very best in getting this process under way.
"It is essential that Justice Hart is given statutory powers to act in this inquiry and we are calling on Peter Robinson and Martin McGuinness to give him these powers."