Mr Estaves will retain his role as chairman and chief of its Latin American business Banco Pactual and will continue to report to Huw Jenkins, chairman and chief executive of UBS Investment Bank.
His new role will mean he is responsible for overseeing the Swiss bank's fixed income products across all markets.
Mr Jenkins said: "We have a clear growth strategy for our fixed income business. Andre brings strong execution and risk management skills to the role, in addition to his emerging markets experience.
"Under his leadership, with a renewed focus on swift implementation, I am confident we can achieve the ambitious step change in market position we are striving for."
Mr Estevez acceded to UBS' board in 2006 when the Zurich-based bank acquired Banco Pacutal. He will replace Simon Bunce, who has left the firm.