Dong was appointed at a meeting of the standing committee of China's National People's Congress, state news agency Xinhua said.
Beijing has not given an official reason for Li's removal after his seven months in the role, which followed a lengthy disappearance from public view.
Li's removal was one of a series of high-level demotions in the country's military establishment.
Three executives at leading Chinese missile defense firms were removed from Beijing's top political advisory committee this week, according to state media.
Fighting alleged corruption has long been a central theme of President Xi Jinping's rule, which has been punctuated by a series of high-level removals and disappearances of officials.
Recent months have also seen an overhaul in the leadership of China's secretive Rocket Force, the army unit that oversees Beijing's nuclear arsenal, following media reports of a corruption probe involving its former chief.
Dong was replaced as head of the navy by Hu Zhongming earlier this month.