Melinda Cilento, chief executive of the Committee for Economic Development of Australia, was appointed to the Reserve Bank's monetary policy board by Treasurer Jim Chalmers on Friday.
A former chief economist at the Business Council of Australia, Ms Cilento will start her five-year term in the role, replacing the outgoing Ian Harper, on September 1.
She has also served as a board member at oil and gas giant Woodside, Wesfarmers Insurance and health insurer Australian Unity.
Dr Chalmers said her appointment followed a thorough and considered selection process, including consultation with the opposition.
"Melinda Cilento is a highly respected economist with broad and deep expertise and experience," he said in a statement.
"This appointment will help ensure the Board has the right mix of skills and perspectives."
Ms Cilento was chosen from a shortlist of candidates compiled by RBA governor Michele Bullock, Treasury secretary Jenny Wilkinson, and former Prime Minister's Department secretary Martin Parkinson.
Along with ex-officio board member Ms Wilkinson, Ms Cilento joins other Labor appointees Marnie Baker, Renee Fry-McKibbin, Iain Ross, Bruce Preston and deputy governor Andrew Hauser.
Only Ms Bullock, who was appointed to the board by former treasurer Josh Frydenberg before becoming chair, and Carolyn Hewson remain from the previous Liberal government.
Like Ms Bullock, Ms Cilento has lamented Australia's weak productivity growth for causing living standards to stagnate.
She has also spoken about the need to address intergenerational inequity, welcoming Labor's efforts to curb tax breaks for property investors in the federal budget.
Her first test in the new role will come at the RBA board's next meeting on September 29.
Markets are fully priced in for another hold in September, after the central bank kept the cash rate steady at 4.35 per cent on Tuesday.
But Ms Bullock's hawkish commentary following the decision left the door open to another hike, keeping the November meeting live to the possibility of another rate rise.
"We've already raised three times, and we will go again if we need to," she told reporters following the meeting.
"And I think personally that it's quite possible we might need to go, but we'll wait and see what the data tells."
