S4C review results expected by end of 2017
A review of S4C will focus on the Welsh broadcaster's remit, governance and funding and will report its findings by the end of the year.
Details of the UK government review were outlined by Wales Office Minister Guto Bebb at the National Eisteddfod at Anglesey on Monday.
Mr Bebb confirmed that S4C's former head of programmes, Euryn Ogwen Williams, is to chair the review.
He also said the BBC would give S4C an extra £350,000 during 2017/18.
This is intended "to provide further stability" for the broadcaster but that the review would consider its future funding.
The Welsh language channel currently receives £74.5m from the TV licence fee and £6.4m from the UK government.
The intention to conduct a review of S4C was announced by the UK government in 2016, but difficulties in appointing a chairperson, as well as the snap general election in June, have delayed its start.
Mr Williams was not at the launch event at S4C's stand at the eisteddfod at Bodedern, but he is expected to consult with audiences and the media industry in assessing S4C's performance and in making recommendations about its future.
In a statement, he said it was a "great honour" to be asked to lead the review.
He said: "The next decade will be even more challenging as S4C, like all public service broadcasters, nurtures the relationship with its audiences in the digital world.
"It must also play a vital role in the development of the Welsh language at a critical time in its history."
- Examine S4C's remit, including with respect to online services, and consider whether changes are required in light of changing viewing habits and technological developments
- Examine S4C's current governance structure and accountability models
- Examine S4C's partnership with the BBC and its current funding methods
Source: UK government
The review must make its recommendations to the UK government within three months of starting its work.
Culture Secretary Karen Bradley welcomed Mr Williams's appointment to chair the review.
She said: "Euryn has great experience in Welsh broadcasting and was the first director of programmes when S4C was set up in 1982.
"His excellent understanding of Welsh broadcasting and the Welsh language, culture and society will only benefit the progress of this important review."
Huw Jones, chairman of the S4C Authority, said Mr Williams was a "perceptive analyst".
"The review will be a key opportunity to note the importance of S4C service's unique contribution to the culture and economy of Wales and the United Kingdom, and to the future of the Welsh language," he said.
Iestyn Garlick, who represents independent TV producers, said the review needed to ensure greater funding in future.
"S4C's unique relationship with the independent production sector in Wales enables it to deliver a range of high quality programmes," he said.
"But an increase in fresh programming is critical to attract audiences, and Teledwyr Annibynnol Cymru (Tac) is, therefore, calling for a one-time 10% rise in the total level of its public funding, which must also be linked to inflation.
"S4C's independence should be maintained and strengthened, with no formal commitment to report to the BBC, and its remit should ensure that the vast majority of its programmes come from the diverse group of production companies spread throughout Wales."