Princeton economist Albert E. Rees, former head of the Council on Wage and Price Stability, today was named president of the Alfred P. Sloan foundation, one of the nation's largest philanthropic institutions.

Rees, now on leave as provost of Princeton University, will succeed Nils Y. Wessell, who retires April 30 after running the Sloan Foundation for 11 years.

The foundation was set up in 1934 by former General Motors Corp. chief executive Alfred P. Soan Jr. It has assets of about $250 million and makes about $15 million in grants each year.

Most of its grants go to colleges and universities for research in economics and management, science and technology.

Rees, 57, is a labor economist who was tapped by President Ford to head the Council on Wage and Price Stability in September 1974.

As council chairman, Rees, a soft-spoken academic, several times found himself in head-to-head confrontation with major industrioes such as steel.

Rees received a doctorate in economics from the University of Chicago and joined its faculty in 1948. He eventually was named chair man of the economics department.

In 1954 and 1955 Rees was a member of the staff of the Coundil of Economic Advisers and during President Nixon's wage and price control program served as a member of the Construction Industry Stabilization Committee. That committee was set up to deal with the special wage inflation problems of the building industries.

Although a Democrat, all of Rees' formal government service has been in Republican administrations.

He joined Princeton University as a professor of economics in 1966 and was chairman of its economics department before taking the Council on Wage and Price Stability post in 1974.

When he was appointed he told President Ford he would not serve for more than a year and resigned July 31, 1975 to return to Princeton as provost.

He has been on leave since last September doing research under the auspices of the National Bureau of Economic Research in Cambridge, Mass. Rees is studying how individuals get their first job.

The Sloan Foundation was the 13th largest philanthropic foundation in 1977. One of its most important project is its commission on government and higher education, which was set up in 1977 to study the impact of the increasing role of public monies in financing universities and colleges.