Segolene Royal, 60, will serve as environment minister in the cabinet of new Prime Minister Manuel Valls.
Manuel Valls was appointed prime minister after the Socialists suffered a humiliating defeat at local elections.
The Finance Minister, Pierre Moscovici, has left the government, with his job now split between two ministers.
Michel Sapin takes charge of finance while Arnaud Montebourg will be in charge of industry and economy.
Laurent Fabius and Jean-Yves Le Drian keep their positions as foreign affairs and defense ministers in the new cabinet, which replaces that led by Jean-Marc Ayrault.
President Francois Hollande, 59, is one of the most unpopular French leaders in decades, having failed to restore the economy.
It is open to question how many of the key new appointments were the choice of Manuel Valls alone. Michel Sapin is a long-time close friend of Francois Hollande.
Michel Sapin’s first task will be to persuade the EU that France is on track after the country again missed its deficit target.
While Manuel Valls is on the right of his party, the new economy minister is most definitely to the left, having previously accused the EU of damaging growth with its demands for cuts.
It is said that Francois Hollande’s most recent official partner, Valerie Trierweiler, had opposed Segolene Royal’s appointment to any position in the government.
Francosi Hollande and Valerie Trierweiler officially split up in January after it emerged he had been having an affair with actress Julie Gayet.
Le Monde ran the headline The revenge of Segolene Royal on its web edition and one French blogger wrote on Twitter: “Sego [Segolene] nominated, break with Trierweiler complete.”
The return of Segolene Royal to government follows a long period when she was out of the political spotlight.
Segolene Royal was the Socialist candidate in the 2007 presidential election, but lost to Nicolas Sarkozy.
Manuel Valls served in the previous cabinet as interior minister, where he became one of few government figures popular among the wider French public.
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