Kevin Rudd will be awarded the post of foreign affairs minister when Julia Gillard announces her new ministry today, with Stephen Smith becoming defence minister.
''Kevin's status as a former party leader and his undoubted capacity meant he is deserving of a senior portfolio where the government can best use his skills," Gillard said in a statement last night.
"His experience and intense interest in foreign affairs makes this the obvious choice."
The current minister for foreign affairs, Stephen Smith, will switch to defence, a notoriously difficult portfolio which the West Australian MP is said to have requested, The Sydney Morning Herald reports.
''Stephen has done an outstanding job as foreign affairs minister and but for these special circumstances where a former leader will take a place on the frontbench I would have had no hesitation asking him to stay on,'' Gillard said.
The cabinet reshuffle is also thought to involve Financial Services Minister Chris Bowen shifting to the position of finance minister.
The position of attorney general is thought to be going to Penny Wong, who will leave the challenging climate change portfolio.
Gillard has another spot to toy with in the drawing up of her ministry since Oakeshott's rejection of the post as minister for regional Australia.
He suggested that accepting the offer may have been too politically fractious as he holds a conservative-leaning seat.
"I'm hoping it can be bought home by someone with potentially less thorns on them," Oakeshott said in a statement yesterday.
"If I was to take this portfolio, I think there are some organisations still in Parliament that may want to bring the package down."
Gillard has a total of three vacancies to fill and is thought to announce the new ministerial line-up later today.
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