The four-year-old tabby joined Cameron and his family from London's Battersea Dogs and Cats Home to tackle pest control issues after a rodent was spotted on the steps of the most famous front door in the land.
Larry is the first such official appointment since stalwart ratter Humphrey was retired in 1997
Just last month the government said there were no plans to bring in a new cat, but the prime minister's official spokesman said yesterday that Cameron had "certainly been persuaded that it was a good idea".
"Whilst in Battersea's care, Larry showed a very strong predatory drive and enjoyed playing with toy mice," the spokesman said.
Larry's appointment comes after a rat was spotted in two television news bulletins scurrying around outside the black door of the prime minister's residence in London.
There has been no Downing Street cat since Sybil, who moved in with then Chancellor of the Exchequer Alistair Darling in 2007 but returned to Edinburgh after six months, having failed to settle in London.
Sybil was the first cat to live in the street since the legendary Humphrey, a stray who took up residence under prime minister Margaret Thatcher and outstayed John Major.
Tony Blair sent Humphrey into retirement in 1997 amid persistent speculation that his wife Cherie forced him out.
Humphrey was on the payroll, receiving £100 (Rs 7,350) a year from the Cabinet Office budget.
But with Cameron's coalition government facing public anger over sweeping cuts to public services, there was no immediate word on where funding for Larry would come from.
Did you know?
US president Theodore Roosevelt had the most amount of pets in the White House during his stay including a snake, a rat, a pony and a one-legged rooster
Rs 7,350
The amount Humphrey, the cat received per year from the Cabinet office