Peter Mandelson will return to his old stomping grounds as business secretary following a government reshuffle.
Formerly the secretary of state for trade and industry, Mandelson has spent the past four years as the British commissioner of the European Union for Trade. Although no longer an MP, he is expected to take a seat in the House of Lords.
The current business secretary John Hutton will replace Des Browne as defence minister, while Geoff Hoon will step down from his role as chief whip to become transport secretary after Ruth Kelly steps down.
The Department for Business, Enterprise and Regulatory Reform will be split in two, creating a new department for energy and climate change to be headed by Ed Miliband.
Derek Draper, a former adviser to Mandelson, said the fact that Mandelson, "the most Blairite Labour figure", was being brought in showed "the Labour Party getting its act together".