Sir Keir Starmer has sacked his shadow chancellor in a shake-up of his team after poor election results in England.
Anneliese Dodds will now become the Labour Party's chair - replacing deputy leader Angela Rayner, who Sir Keir fired from the role on Saturday.
Ms Rayner will instead replace Rachel Reeves in shadowing Michael Gove at the Cabinet Office, as Ms Reeves is promoted to the shadow chancellor role.
In a statement, he added that Labour "must be the party that embraces the demand for change across our country" - and that the new shadow cabinet was the right one to take on the challenge.
After the announcement, Ms Rayner said she would use her new role to "focus on the future of work and the future of our economy".
And new shadow chancellor Ms Reeves said she was "honoured" to take on the job, tweeting: "Our economic recovery must be fair.
Labour's leader had been accused of making Ms Rayner a "scapegoat" for the election results after her sacking was confirmed, but Sir Keir insisted he took "full responsibility" for the party's performance.
Apart from deputy leader, her titles will include shadow first secretary of state, shadow chancellor of the Duchy of Lancaster and shadow secretary of state for the future of work.
An ally of Ms Rayner said she had come out "significantly more powerful, both in terms of the party and policy", while a Labour insider told the BBC: "Who would want to be national campaign coordinator in name only with no power when you're just made the scapegoat for the failures of Keir's team?".
In response to the change in role, Ms Rayner tweeted: "I will work tirelessly to reform our party and deliver a policy agenda that will enable us to reconnect with the voters that we need to win, especially in our traditional heartlands, and show that the Labour Party speaks for the working class.".
Nia Griffiths, who will stay in her post as Labour's shadow Wales secretary, said reshuffles were "perfectly normal" for political parties.
Lisa Nandy is expected to remain as shadow foreign secretary, while Jonathan Ashworth will stay in his role as shadow health secretary.
Sir Keir said: "The Labour Party must be the party that embraces the demand for change across our country.
"I look forward to working with our refreshed and renewed team to take on that challenge, deliver that change and build the ambitious programme that will deliver the next Labour government."