Ana Matosantos will become Gov. Arnold Schwarzenegger's new finance director this month as he prepares to deliver his final budget proposal to cover a projected $21 billion shortfall, his office announced Monday.

Matosantos, 34, is currently chief deputy in the Department of Finance, where she has worked since April 2008. She will take over for finance director Michael Genest on Dec. 31, days before the governor gives his annual budget proposal in January.

The nonpartisan Legislative Analyst's Office last month projected that the state faces nearly a $21 billion gap through June 2011, partly because of legal problems with budget cuts passed in the last year and overly optimistic assumptions for ways to generate revenue.

Schwarzenegger's office touted Matosantos, a native of Puerto Rico, as the first Latina finance director in state history. She is also believed to be the youngest to serve in the position.

"I know Ana is the right person to take on this important role at such a crucial time for California," Schwarzenegger said in a statement. "In the coming year, our state will have to make incredibly challenging and tough budget decisions, and Ana has the knowledge and expertise necessary to guide my administration through that decision-making process."

Matosantos, a Democrat, has testified on behalf of the Department of Finance in budget hearings over the past two years. In May, she was the bearer of grim news, telling a budget committee that the governor sought to eliminate the state's welfare-to-work program and close 80 percent of state parks to overcome a then-$24 billion deficit.

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