Field will consider two key areas, including whether the current definition of poverty should be changed. Currently households with less than 60 per cent of the average income are classed as poverty stricken.
Field has previously criticised the arbitrary nature of the definition.
He will also consider how to encourage parents and local services to nurture children.
The former Labour welfare reform minister will remain as Labour MP for Birkenhead.
Field quit as minister less than 12 months after Labour came to power in 1997 following rows with then Chancellor Gordon Brown and then Social Security Secretary Harriet Harman over his radical welfare proposals.
Field says: “This is a real opportunity to influence the next stage in how our counter-poverty strategy develops and I am pleased to be offered this chance to lead the review.”