Shaun Woodward has said he will not take any extra payment for his role as the new Northern Ireland secretary.
Shaun Woodward is the new Northern Ireland secretary
He replaces Peter Hain, who has been appointed as the new Secretary of State for Work and Pensions.
Mr Woodward held the security, health and regional development portfolios in NI until a 2006 reshuffle.
Mr Woodward, who is married to the supermarket heiress Camilla Sainsbury, said the only salary he would receive would be for his role as an MP.
He said he wanted to play his part in achieving the devolution of policing and justice powers from the Northern Ireland Office to the assembly.
The government hopes to hand these powers over to the executive by the summer of next year, although the DUP has already indicated that this timetable will not be met.
"The restoration of power-sharing in Northern Ireland has restored local democracy and that is as it should be," Mr Woodward said.
"I want to pay tribute to Peter Hain who played a key role in bringing that about."
Sinn Fein's Mitchel McLaughlin said his party would be seeking an urgent meeting with Mr Woodward to discuss the government's economic package for Northern Ireland.
"We expect the new incumbent to build upon the progress we have secured in recent months and continue to work alongside the Irish government and all of the parties in ensuring that all outstanding matters are dealt with," he said.
After leaving Northern Ireland in 2006, Mr Woodward has been the UK's film minister in the Department of Culture, Media and Sport.
The St Helen's MP is a former Tory director of communications, who defected to Labour.
A millionaire, he does not like people dwelling on his family wealth, putting the regular stories about his wealth and his butler down to jealousy.
The post of Northern Ireland secretary was last week offered to Liberal Democrat peer Lord Ashdown, who turned it down.