Labour MP Frank Field is to head up an independent review into UK poverty that will report to the government.
Mr Field, who was briefly welfare reform minister under Tony Blair, said he was pleased to be offered the role which would influence poverty strategy.
He is the first Labour MP to accept a job with the Conservative-Lib Dem coalition government.
His review will report to Prime Minister David Cameron by the end of the year.
Mr Field was famously told to "think the unthinkable" by Tony Blair when he was welfare reform minister - only to resign later after reported rows with Gordon Brown and Harriet Harman.
He led Labour's backbench revolt against Mr Brown's abolition of the 10p tax rate in 2008 and confirmed Mr Cameron had offered him a job as an anti-poverty "tsar", reporting back to the Conservative-Lib Dem coalition government.
Downing Street has confirmed he will "lead an independent review on poverty in the UK and what the government can do to improve the lives of the least advantaged people in our society".
It says the Review on Poverty and Life Chances will look at whether measures need to be reformed, how children's learning is affected by their home life and recommend action to reduce poverty for the least advantaged "consistent with the government's fiscal strategy".
Mr Field, the MP for Birkenhead, said it was "a real opportunity to influence the next stage in how our counter-poverty strategy develops".
He said he was offered a job as the coalition's "poverty tsar" after the general election but feared he would be doing the same job as the Commission on Child Poverty.
Mr Field said that he did not agree to do the job until the coalition government had given him guarantees on the review's independence and scope.
He will work with officials from a number of government departments, including the Treasury and Home Office, as well as Work and Pensions.
Mr Field told the BBC he will look at new ways of measuring poverty and of measuring how effective public spending is in helping to tackle its root causes.
He told BBC Radio 4's Today programme: "I hope we will have a programme of action, particularly emphasising how we put all our emphasis on extending life chances for poorer children that we have something which is workable which the government can actually act on.
"I don't think we need lots of brilliant new ideas, lots of people have done work, we now need to bring that together and shape it in a way which leads to action."
Referring to the "think the unthinkable" instruction, he said: "My whole life is about thinking the workable. I can sound off as a person in wasteland, talking about issues which I think are centrally important or I can come up with proposals which will maybe win agreement across parties."
Prime Minister David Cameron said he was "pleased" Mr Field had agreed to carry out the review, adding he hoped he would help find out what "keeps people trapped in poverty".
Work and Pensions Secretary Iain Duncan Smith added: "Tackling poverty is a key priority for this coalition government and we warmly welcome the expertise Frank will bring to the table.
"I look forward to receiving his report and working with him over the next six months. In order to effectively address deep seated poverty and its associated problems we will need cross-party support.
"Despite the vast amounts of money that has been thrown at the problem, the numbers in poverty remain worryingly high and we now have a unique opportunity to give people back the dignity and independence they need and deserve."
In the coalition deal, the government pledged to "maintain the goal of ending child poverty in the UK by 2020", which was set by Tony Blair.