Three-time lawmaker and Labor Minister Yim Tae-hee has become the presidential chief of staff prior to replacement of several other senior secretaries.
"Employment and Labor Minister Yim Tae-hee has been named presidential chief of staff," Lee's office, Cheong Wa Dae, announced.
The appointment reflects the president's efforts to turn the table on his troubled leadership following his Grand National Party (GNP)'s unexpected defeat in the June 2 local elections, which have been widely regarded as a mid-term referendum on his performance.
The National Assembly also voted down Lee's ambitious project to create a business-education hub in the central province of Chungcheong in lieu of an originally planned administrative town. Lee's other centerpiece project, cleaning and refurbishing the country's four major rivers, also faces fierce backlash from opposition parties, civic groups, and religious leaders who express worries of an environmental disaster.
Furthermore, despite the country's quick recovery from global the financial crisis, ordinary citizens of the world's 15th largest economy have yet to feel its effects amid looming inflation.
Lee, who begins the second half of his single five-year tenure next month, has hinted at sweeping changes of presidential staff and Cabinet members. Cheong Wa Dae officials said the president is looking for "young figures," especially those in their late 40s or early 50s.
Yim, 54, is young compared to his predecessors, including Chung Chung-kil, 68, who offered to step down to take responsibility for the election results.
Yim is known for his expertise in finance and political affairs. He studied business administration at Seoul National University and worked at the finance ministry for two decades before making the switch to politics. He was elected lawmaker for the first time in 2000 and served as spokesman for the GNP and its chief policy coordinator. He has been serving as labor minister since September 2009.
He reportedly held a secret meeting with Kim Yang-gon, North Korea's point of contact for the South, in Singapore late last year in an unsuccessful attempt to arrange an inter-Korean summit.
Yim is said to be a figure who "reads President Lee's minds most well" as he was the chief secretary to Lee during his presidential campaign and as he made preparations for the transition into the presidency.
Yim is expected to give up his parliamentary seat in accordance with a political practice.
The new line-up of senior secretaries to the presidential office is expected to be announced as early as Sunday. The Cabinet shake-up is expected to take place around the July 28 by-elections for eight parliamentary seats.
Lee reorganized his office on Wednesday, creating the post for a senior secretary for social integration tasked with improving communication with the people and that of a senior officer for national future to draw up long-term strategies for South Korea's development in various fields, including science and green growth.