The Israeli Cabinet today appointed Maj. Gen. Moshe Levy to be the Israeli Army's next chief of staff, replacing Lt. Gen. Rafael Eitan, who will retire in April.

Levy, 46, has been the Army's deputy chief of staff since 1981 and was Defense Minister Moshe Arens' choice to succeed Eitan.

Eitan was named chief of staff in April 1978, and his five-year term in that post was the longest in the history of the Israeli Army. However, he will leave the Army next month under a cloud of criticism by the Israeli commission that investigated the massacre of Palestinian refugees in West Beirut in September.

The commission, which said Eitan and former defense minister Ariel Sharon bore the most responsibility for allowing Lebanese Christian militiamen into the refugee camps where the massacre took place, made clear it did not call for Eitan's removal only because of his impending retirement.

There has been speculation here that after he leaves the military, Eitan will enter politics as an advocate of right-wing causes.

Levy will be the Army's 12th chief of staff and its first of non-European ancestry. The son of Iraqi immigrants, he was born in Tel Aviv and joined the Army in 1954. He served in an elite combat brigade and fought in the Sinai in the 1956 war and in the Sinai and the Golan Heights in the 1967 war.

At different points in his career, Levy has been the Army's chief infantry and paratrooper officer, commander of its armor corps and in charge of special projects for the general staff. He also has directed antiterrorist activities against Palestinian guerrillas.

In 1977, Levy was promoted to major general and named the Army's central commander, a post that put him in charge of the occupied West Bank.

Two other officers also were mentioned as possible successors to Eitan. They were Maj. Gen. Avigdor Ben-Gal, a former northern commander, and Maj. Gen. Dan Shomron, a former southern commander, both of whom have been on recent leaves of absence for study abroad. Arens, however, was said to prefer the less flamboyant Levy, who is best known for his administrative skills.

Levy's nickname is "Moshe and a Half" because his great height made him tower over one of the best-known military figures in Israeli history, Moshe Dayan.

The Israeli Army chief of staff normally serves a term of three to four years.