Staley, currently the deputy head of global commodities, will replace Citi veteran John Casaudoumecq, who plans to retire, according to a memo Reuters obtained from the company.
Prior to joining Citi in 2004, Staley was CEO of AEP Energy Ltd in London and worked for Enron for six years in both Houston and London.
Casaudoumecq worked for Citi for 25 years, and managed Canadian fixed income trading, the company's San Francisco office, and U.S. fixed income derivatives sales and structuring.
Staley will move to London from Houston in April.
Citigroup has made a push to expand its commodities business in recent years. In 2007, Casaudoumecq moved to London from New York to help establish the company's European commodity business.
Citigroup's Value-at-Risk, or VaR, for commodities has jumped in the past year, a recent U.S. Securities and Exchange Commission filing shows.
VaR figures represent the money a financial institution is willing to risk, or the confidence level it has in trading a particular market in a day.
Citi's VaR for commodities on average during the third quarter of 2009 was $38 million, up from $20 million in the same quarter of 2008.
Citi's global commodities business currently employs 230 people in Houston, Calgary, New York, London, Singapore and Tokyo, and the company hopes to further expand its headcount by 30 to 40 percent over the next three years, the bank said in an email.
Citibank's global commodities business trades natural gas, electricity, oil, metals, agricultural products, freight, emissions, liquefied natural gas and coal.
Citigroup and other investment banks have expanded their commodities and energy trading in recent years, partly to capitalize on growth in demand for products to hedge volatile prices.
Standard & Poor's on Tuesday revised its rating outlooks on Citigroup to negative from stable, citing uncertainty whether the government will provide more extraordinary support that benefits debt holders.
The bank posted a $7.6 billion loss for the fourth quarter of 2009, narrowing to 33 cents a share from $3.40 a share a year earlier, leading investors to speculate that the bank may be recovering after toxic assets forced the company to borrow $45 billion under the U.S. Troubled Asset Relief Program.
Nevertheless, Chief Executive Vikram Pandit has said that losses could increase in the first quarter.
(Reporting by Rebekah Kebede; Editing by Marguerita Choy and Jim Marshall)