Dennis Wise will help Newcastle to sign players and develop their academy in his new role at the club.
The former Chelsea star has left his job as Leeds manager to join Newcastle and assist the board as an executive director on "football-related" matters.
New manager Kevin Keegan will have control of first-team affairs.
"This is all part of the vision that recently helped us to secure Kevin Keegan's return to the club as manager," said chairman Chris Mort.
Newcastle have also brought in Tony Jimenez as vice-president of player recruitment and Jeff Vetere from Real Madrid as technical co-ordinator.
The surprise move for Wise and his fellow new board members is believed to be designed to create a new tier of management at St James' Park.
On Monday, Keegan said he was "reluctant to tell all I know because I really do not know everything" about Wise's role but insisted he was "very happy" with the situation.
"He's got a real good aura around him and it's nice to see him back"
However, Keegan's comments seem to contradict the opinion he gave to BBC One's Inside Sport last October, when he said he felt that kind of structure is unworkable.
When Keegan was asked about reports linking him with a return to Newcastle as director of football under then-manager Sam Allardyce, he said: "It's absolutely impossible to give Sam a job at Newcastle and then go and fetch someone who is going to be some sort of threat, it doesn't work.
"Sam would be a fool to let it happen and the guy who goes in would be a fool to accept it. "The chairman, who is not a fool, would be a fool to go and do it, too. It doesn't work."
But Mort, who was appointed after billionaire Mike Ashley bought the club, believes there is a need for someone with a knowledge about football within the club's hierarchy.
He added: "Two of the conclusions of our strategic review, since acquiring the club, were that the club would benefit from having a football person involved at board level, which it has not had historically.
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"Also, that further senior resources are needed for recruiting players of the highest quality from this country and further afield.
"Dennis would like to move away from day-to-day football management to a board role and, with his considerable energy and intelligence, we believe he will do very well.
"With Kevin able to devote his efforts to developing and running the first-team squad, Dennis, Tony and Jeff will each help us to secure success for Newcastle at all levels for the long-term.
"One or two further appointments will follow in the months ahead."
Wise played for England under Keegan and spent 15 months at Leeds.
He arrived at Elland Road with the club already sliding towards League Two.
But, despite a 15-point penalty for going into administration at the end of last season, he has steered the club into contention for the promotion play-off places this term.
Wise began his managerial career as player-boss at Millwall, steering the Lions to the 2004 FA Cup final which they lost 3-0 to Manchester United.
Wise then had a brief spell as joint-caretaker boss of Southampton before taking over at League Two side Swindon, enjoying instant success before leaving for Leeds in October 2006.
It is the second time this term that Leeds haves lost a member of their managerial team to a Premier League club following assistant manager Gus Poyet's move to Tottenham.
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