Former business leader Sir Digby Jones is set to be appointed as a Government Minister as Gordon Brown moves to bring in people "of all talents" to his administration.
Sir Digby, ex-director-general of the CBI, is to be appointed a Life Peer and a Minister of State at the new Department for Business and Enterprise.
He will take up the Labour whip in the House of Lords but he will not be joining the Labour Party.
The appointment will mark a dramatic change and signal the new Prime Minister's drive to widen the scope of expertise in Government.
Sir Digby has been working as the Government's Skills tsar and has worked tirelessly since leaving the CBI to press the need for workers to improve their skills in a bid to boost British business.
Meanwhile the former head of the Royal Navy, Admiral Sir Alan West, has been appointed as new Home Office Minister for Security, Home Secretary Jacqui Smith said.
The surprise move was announced by Home Secretary Jacqui Smith following a special meeting of the Cabinet.
The meeting had been called by Mr Brown to discuss his plans for constitutional reform and rebuilding of public trust in politics.
However ministers were briefed by Ms Smith on the car bomb discovered outside a nightclub in London's Haymarket.
Following the full Cabinet meeting, Ms Smith and Sir Alan then held a private session with Mr Brown to discuss the terrorist threat.
