Sir Keir Starmer, the former head of the Crown Prosecution Service, who stormed out of Jeremy Corbyn's shadow cabinet in protest at his leadership, will return to Labour's front benches.
Mr Corbyn has begun his latest reshuffle, inviting Sir Keir back as shadow Brexit secretary, in a move that brings forward one of the major moderate figures to the top team.
Shami Chakrabarti, the former Liberty director who carried out a controversial investigation into anti-Semitism in the Labour Party, has also been appointed to the shadow cabinet as the new shadow attorney general, the Labour leader announced.
Mr Corbyn also handed a major promotion to his long-time ally Diane Abbott, making her shadow home secretary.
The Labour leader is rebuilding his front benches after the mass walk-out of shadow cabinet members who opposed him in the aftermath of the Brexit vote in June. Dozens of posts were left unfilled, with many Corbyn loyalists "double jobbing" in multiple roles.
His reshuffle in the wake of his second leadership victory is set to continue on Friday.
Mr Corbyn said: "Keir brings vital experience to this role at what is a crucial time for Britain."
But the leader ousted chief whip Rosie Winterton, who had been attempting to broker an agreement over shadow cabinet elections, replacing her with veteran Nick Brown, a long-standing ally of former leader Gordon Brown.
Mr Corbyn has been resistant to calls from former shadow cabinet members for the body's membership to be decided by a ballot of MPs.
But the appointment of Mr Brown and Sir Keir may be a signal from the Labour leader that he wants to reach out to critics on the back benches - while those who have previously expressed a lack of confidence in him show they are prepared to return after his landslide re-election by the membership.
However, a number of anti-Corbyn MPs, such as failed leadership challenger Owen Smith, have insisted they could not serve under him.
Former whip Tom Blenkinsop was quick to hit out at the leader over his reshuffle, accusing him of rowing back on his promise to unite the party.
He said: "Clear Corbyn wants submission not unity. Ignoring wishes of the PLP and just sacking and appointing regardless."
The high-profile role for Lady Chakrabarti comes after she was forced to defend herself over her peerage nomination, which was announced just a month after her anti-Semitism inquiry into the Labour Party concluded amid claims from critics that it was too soft.
The appointment was met with fierce criticism from prominent Jews and Labour MPs, who questioned her independence.
She has insisted there was "nothing remotely transactional" about her report when pressed if there were any talks about a peerage before it was completed.
Clive Lewis, who only became an MP for the first time last year, has risen sharply through the ranks - from shadow defence secretary to shadow business secretary, replacing Jon Trickett.
Mr Corbyn has also appointed Sarah Champion to the role of shadow women and equalities minister, and Jo Stevens as shadow Welsh secretary.
Ms Champion was one of dozens of Labour frontbenchers who quit in protest at Mr Corbyn's leadership in June - only to ask for her job back a month later.
She was reinstated as shadow home office minister for preventing abuse and domestic violence and received Mr Corbyn's backing after she admitted she "lost control" and ended up in a police cell during an argument with her ex-husband back in 2007.
With Dawn Butler given the shadow minister for black and minority ethnic communities portfolio, Mr Corbyn said: "I am delighted to announce the appointment of Dawn to my shadow cabinet. I am very proud that the Labour Party now has five MPs in our shadow cabinet from the BAME community - the highest number ever in any cabinet or shadow cabinet."
With shadow chancellor John McDonnell expected to stay in place as shadow chancellor and Emily Thornberry likely to retain the foreign affairs brief, the four most senior positions in the body will all be held by London MPs.
In a bid to stress regional balance in the top team, Mr Corbyn said the appointment of Jonathan Reynolds to the role of shadow economic secretary to the treasury meant there were 10 MPs from the north of England on the front bench.
The former shadow transport minister was another frontbencher to quit his role before later indicating his willingness to work with Mr Corbyn again.
Mr Trickett has been moved to shadow Lord President of the Council and Labour's national campaigns co-ordinator and Nia Griffith becomes shadow defence secretary.
A Labour Party spokesman said: "Jeremy has today spoken to a number of colleagues in the Parliamentary Labour Party and will continue to do so throughout the day. He has begun the process of appointing a new front bench team."