BOSTON — Rep. Jeffrey Sanchez was tapped Monday by Speaker Robert DeLeo to chair the powerful House Ways and Means Committee, a position that establishes the Boston Democrat as a contender to eventually succeed DeLeo as the top House Democrat.

Sanchez, in his eighth term in the Legislature, was installed as chairman of the panel less than a week after Brian Dempsey’s surprise announcement that he was leaving Beacon Hill to join ML Strategies, a prominent Boston lobbying firm.

Dempsey, a Haverhill Democrat, had been widely viewed as heir apparent to the speakership, one of the three most powerful political positions at the Statehouse along with the governor and Senate president.

The Ways and Means Committee writes the House version of the annual $40 billion state budget and reviews scores of other bills before they are sent to the floor for debate.

DeLeo, in a statement, cited Sanchez’s “intellect, experience and leadership skills” and prior work as chairman of the Public Health and Health Care Financing committees.

“This experience will be crucial as we address the health care challenges inherent to the budget and grapple with uncertainty on the national level,” said DeLeo, who praised Sanchez as a consensus builder.

The House Democratic caucus on Monday formally ratified the appointment of Sanchez, who has represented the Jamaica Plain neighborhood of Boston since 2003 and is a member of the Legislature’s Black and Latino Caucus.

“I’m incredibly humbled to be nominated for this position by the speaker,” he said, adding that he hoped to use the post to help protect the state’s finances and economy, along with Massachusetts’ neediest residents.

The position is seen as a natural steppingstone to the speaker’s office and one that DeLeo himself served in before he was elected to the top House post in 2009. But there are no assurances that Sanchez would be the next speaker, as other candidates could emerge to vie for the support of House Democrats.

DeLeo, meanwhile, has given no indication of when he plans to step aside. The Winthrop Democrat told reporters last week he plans to run for re-election in 2018.