Dinenage, who was appointed to the role in August 2016, has been appointed parliamentary under-secretary of state at the department.
It is unclear who will take on her responsibilities as childcare minister, with the Department for Education yet to comment on what will happen to her brief.
The decision to move Dinenage comes just months before a major expansion of free childcare provision.
From September, working parents in England will be entitled to 30 hours of free childcare for three-and four-year-olds, up from the current 15 hours.
Dinenage said she is "excited" by the new role.
Excited for new challenges @DWP but will miss all my great friends at @WomenEqualities & @educationgovuk https://t.co/u6HD3NmQPG
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