Helen Liddell is being lined up to be the next British high commissioner to Australia, says the government.
Ms Liddell was Scottish secretary until last June
The ex-Scottish secretary and Labour MP will get the job if Labour win the next general election tipped for 2005.
Tony Blair said Ms Liddell would be "an outstanding high commissioner to Australia".
She left the government in last June's Cabinet reshuffle saying she wanted to spend more time with her husband, family and friends.
The post of Scottish secretary was given to Alistair Darling who is also transport secretary.
Responding to the announcement Ms Liddell said she was "delighted".
"It is many years since a Labour politician was appointed to a diplomatic
post and I am honoured that I should have been chosen," she said in a statement.
"Australia is a wonderful place, and although I will miss this country, I and my family have been offered the chance of a wonderful experience."
In his statement, Mr Blair said: "I have known and worked with Helen Liddell for many years - she has been a valued colleague and a good friend.
"She has had a long and successful career in both politics and business and will make an outstanding high commissioner to Australia.
"The friendship between Britain and Australia is very important to both countries.
"Alastair Goodlad, the current High Commissioner, is doing an excellent job and I am delighted that we have found such a high calibre of person to succeed him when he finishes his term of office.
"Helen will bring to the post a great deal of valuable experience at the highest level and will, I am sure, be a great success."
In order to take up her post, Ms Liddell will have to stand down from Parliament at the next election.
Fellow Scot, Health Secretary John Reid said Ms Liddell had been a "great servant" to the people of her Airdrie and Shotts constituency.
He added: "She has made a marvellous contribution to the Labour Party, the government and her country.
"She was the first ever female general secretary of the Scottish Labour Party and served right through to becoming the first ever female Secretary of State for her country.
"That is testimony to her success.
"Her appointment as the next British High Commissioner to Australia marks an exciting new stage in her illustrious career."
Friday's announcement could fuel speculation about a future job for fellow Labour MP and ex-Cabinet minister Peter Mandelson.
His name had also been touted as a possible replacement to Sir Alastair Goodlad - the current high commissioner.
There has also been speculation about Mr Mandelson becoming a European commissioner.
He was asked if he was being considered for that job during a radio interview to which he replied: "Not that I know of".
"I know that there is the usual speculation and tittle-tattle in the newspapers that passes for journalism in today's media, but I am very happy as I am, thank you, and I see absolutely no reason why you or anyone else should want to pack me off to Brussels."