Rachel Stephen-Smith will be the ACT's 14th deputy chief minister after Labor's caucus unanimously decided the long-serving health minister would be Yvette Berry's successor on Monday morning.
Caitlin Tough, the first-term member for Brindabella, has also been elevated to Chief Minister Andrew Barr's eight-member cabinet.
Mr Barr unveiled a major cabinet reshuffle on Monday afternoon, which included appointing Ms Stephen-Smith to lead the territory's education portfolio and handing over the health portfolio to Marisa Paterson.
Ms Stephen-Smith will still be responsible for health infrastructure, including the $1 billion northside hospital project, and Chris Steel will stay in charge of the light rail project while Tara Cheyne takes on transport.
"All humans make mistakes. We have acknowledged and apologised for mistakes. No one is perfect," Mr Barr said.
"But what I can say is that this team is committed to delivering on the things we took to the election and working as constructively as we can with a very diverse parliament in a very fractured political environment to achieve as much as we can for Canberrans."
Ms Stephen-Smith said she was excited to take over the education portfolio and would continue the work of Ms Berry who had laid out a very clear plan for "significant reform".
"I joined the Labor Party because I believe in public education. That was one of the things that drove me. I did not believe at the time under the Howard government that there was sufficient investment in public education and that we were really setting our children up for the future," she said.
"Education should provide an opportunity for every child and young person to thrive and live their best life and participate in our society and our economy."
Ms Berry resigned from cabinet last week in the wake of a corruption investigation that found her former chief of staff engaged in serious corrupt conduct.
Although Ms Berry was cleared of any wrongdoing, the ministerial code of conduct requires ministers to take responsibility for their staffers' actions.
Ms Stephen-Smith was seen as the likely successor to Ms Berry, who was the ACT's longest-serving deputy chief minister after holding the position for more than nine years.
"I understand that I do have the confidence of my colleagues but that will be a matter for caucus to determine this morning," Ms Stephen-Smith told ABC radio on Monday morning ahead of a Labor caucus meeting.
The new cabinet positions will take effect from Thursday and the cabinet will meet for the first time on August 5.
Ms Stephen-Smith said she would retain responsibility for health infrastructure to ensure continuity in the system and would support Dr Paterson as she got up to speed in the complex portfolio.
Mr Barr confirmed Ms Tough and Ms Stephen-Smith had been elevated by cabinet unanimously.
Ms Tough said she did not expect to be in cabinet so soon but was excited and honoured her colleagues had trusted her with the position.
"I think it's really important of a rebalancing of cabinet to have someone from Brindabella back at the table and have the voice of Tuggeranong back in the room with decisions being made. So I plan to really stand up for my community of Tuggeranong in the cabinet room," she said.
Mr Barr rejected the notion Mr Steel being relieved of the responsibility for transport would appear like a demotion. Mr Steel had previously asked to serve as sports minister and would now get the chance, he said.
"The transport portfolio is largely operational. Strategic transport planning has always sat with the planning minister. Light rail stage 2B is intrinsically linked to the southern gateway strategy that Minister Steel launched last week," Mr Barr said.
"It's still in the planning phase. When it moves into the delivery and procurement phase, it would move to Infrastructure Canberra. They are our delivery agency. But now it is in the planning phase and sits with the planning minister. There's also, I think, important continuity."
Opposition Leader Mark Parton said the government was "corrupt" and was in genuine crisis.
"I think from the perspective of most Canberrans out in the suburbs, to quote that iconic phrase, you can reshuffle the deck chairs, you can rearrange the deck chairs as much as you like," Mr Parton said after the new cabinet was announced.
"But I'm not sure that it's going to get better outcomes."
Mr Barr had batted away the suggestion of the "obviously ... well-used cliche" at his earlier press conference.
"We know we have to work hard. But again, we don't get much independent public polling. But we did get one last week. And I think that showed in spite of some quite tectonic shifts in Australian politics that Labor still remains the party with the greatest support in the community and now by quite some margin," he said.
