Powell, MP for Manchester Central since November 2012, replaces Tristram Hunt, who held the post since 2013.
“It's a role I'm passionate about and where I hope to make a difference," Powell, who had backed Andy Burnham for Labour leader, said on Twitter.
Powell's most recent role within the Labour Party was to co-ordinate the 2015 general election campaign.
Prior to this she also spent time as shadow childcare and early years minister.
In an interview with CYP Now following her appointment to that position, Powell, who has two young children and a stepson, said she was "only too well aware of the issues facing parents".
"My priorities are to get out there to talk to mums and dads about the sector and the issues they are facing," she said.
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