Ms Beckett, who has held ministerial and shadow ministerial posts almost continuously for 34 years, replaces Caroline Flint who becomes Europe minister. Like Ms Flint, she will attend Cabinet meetings.
The Labour veteran and former deputy party leader will be put straight back into the firing line with the planning guidelines for eco towns expected next week.
Other notable moves saw Ed Miliband appointed to head a new department for energy and climate change.
Mr Miliband will head the newly created department which will take over parts of the Departments for Environment, Food and Rural Affairs and Business, Enterprise and Regulatory Reform.
Mr Miliband has been Cabinet Office secretary since Gordon Brown became prime minister last year.
The biggest shock of the day saw Peter Mandelson returning to the government as Business Secretary, losing the energy portfolio to the new Department for Energy and Climate Change.