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Prime Minister Rishi Sunak has appointed Grant Shapps as the new energy and net zero secretary in a shake-up of government departments.
The Department for Business, Energy and Industrial Strategy has been broken up as part of the reorganisation.
Greg Hands has replaced Nadhim Zahawi after the former Tory party chairman was sacked over his tax affairs.
And Lucy Frazer will head up a streamlined department of culture, media, and sport.
Mr Sunak's top team of ministers will meet in the coming hours to discuss the changes.
The government said the new Department for Energy Security and Net Zero will be "tasked with securing our long-term energy supply, bringing down bills and halving inflation".
Mr Sunak promised last summer - when he was campaigning to be Conservative leader - to re-establish a standalone department for energy.
The change will see business and trade merged in one department, headed by Kemi Badenoch, and the creation of a new department focused on science, innovation and technology, led by Michelle Donelan.
There have been no changes to the position of Dominic Raab, the deputy prime minister. The BBC understands Mr Sunak is waiting for a report into bullying allegations against Mr Raab before deciding on his future.
There had been speculation about a potential reshuffle in recent days, despite talk of changes being dismissed by the prime minister's team.
Mr Sunak has been under pressure to assert his authority over his government and party since taking office in October last year, following the resignation of two prime ministers in a period of heightened political turbulence.
But his government has been dogged by political controversies in recent weeks and the Conservatives continue to trial Labour in the opinion polls.