Shapps, who led the country’s transport operations during the Covid-19 pandemic, replaces outgoing defence secretary Ben Wallace.
The Welwyn Hatfield MP was welcomed into the role by former prime minister Boris Johnson – despite Shapps urging him to resign from his post last year "with dignity" – who said: "Sad to see departure of my friend Ben Wallace. Grant Shapps is an excellent choice to succeed him."
"I’m honoured to be appointed as defence secretary by Rishi Sunak," Shapps said. "I’d like to pay tribute to the enormous contribution Ben Wallace has made to UK defence and global security over the last four years."
Shapps is most well known among the travel industry for his role in the traffic light system for international holiday destinations during the pandemic, despite saying in 2021 travellers should “be able to enjoy their holidays without having to look over their shoulders”.
In July 2022, Shapps entered the Tory leadership race, but pulled his name from contention just 48 hours later.
He was then replaced as transport secretary by Anne-Marie Trevelyan in September 2022 under Lizz Truss’ government, before he was appointed home secretary a month later.
Shapps then took the lead on Package Travel Regulations (PTR) after he was appointed business secretary by prime minister Rishi Sunak as part of his cabinet reshuffle. He was then appointed energy secretary earlier this year.