The MP for South Staffordshire replaces Damian Hinds, who quit following the arrival of the new prime minister.
The news came as PM Boris Johnson began a string of cabinet sackings of supporters of his Tory leadership rival Jeremy Hunt.
Hinds, who has has been MP for East Hampshire since 2010, and voted remain, announced his departure on Twitter.
He tweeted he was looking forward to supporting the government from the backbenches.
He served as Exchequer Secretary to the Treasury from 2015, until he was made employment minister at the Department for Work and Pensions by Prime Minister Theresa May in 2016.
Following the 2018 cabinet reshuffle, Hinds succeed Justine Greening as education secretary.
It has been the greatest privilege to serve as Education Secretary. Thank you to the brilliant team at @educationgovuk. And thank you to everyone working in education and children's care, for all you do. I look forward to supporting the government from the backbenches.— Damian Hinds (@DamianHinds) July 24, 2019
Williamson's appointment rewards him for masterminding Johnson's leadership campaign, and marks a dramatic return following his sacking in May, after a Whitehall probe found him guilty of leaking details from a national security council meeting.
The Tory MP has strenuously denied being the source of the leak over Huawei's 5G network in Britain.
Williamson, who attended a comprehensive school before gaining his science degree, previously had a career in manufacturing, and his website states that he successfully turned around a struggling pottery in Staffordshrie.
He went on to head an architecture firm which was involved in designing schools as well as public sector buildings, and is a trustee of a Citizen's Advice Bureau, as well as a school governor.
His Westminster career features a spell as chief whip, when he kept a pet tarantula called Kronos on his desk.
The early years sector welcomed the appointment, with Neil Leitch, chief executive of the Early Years Alliance saying that he hoped his comprehensive education and background in business would help him recognise the importance of the early years to social mobility.
However Leitch took the opportunity to highlight what he described as a "time of crisis in early years education", and urged the new Education Secretary to act urgently to fund it properly.
"There is a lot of ground to make up for the massive £662 million funding shortfall following years of underfunding of the government's flagship childcare schemes," he said.
"With almost 10,000 childcare providers closing for good between 2016 and 2018 and many more anticipating closure in the next twelve months, proper funding is needed to stop the total disintegration of the sector."
The National Education Union also highlighted the teacher recruitment crisis and wider funding pressures.
NEU joint general secretary Kevin Courtney said: "Past Secretaries of State have failed to make any serious progress on these issues, and all the while children's education and wellbeing are suffering."
Association of Employment and Learning Providers chief executive Mark Dawe, said the organisation was encouraged by Williamson's championing of apprenticeships in parliament.
Dawe called on the MP to push the case for these and other skills programmes "hard with the Treasury because the importance of a homegrown well-skilled workforce cannot be exaggerated as we prepare for Brexit".
Johnson's reshuffle also sees the PM's brother and former transport minister Jo Johnson returning to ministerial posts but this time in the education and business departments.
This follows the remainer's November 2018 resignation as transport minister over then-PM Theresa May's Brexit deal, when he said he would campaign for a second referendum.
Nadhim Zahawi was still in post as children's minister at time of publication.
Matt Hancock retains his role as Health and Social Care Secretary, and Robert Jenrick has been named as the Secretary of State for Housing, Communities and Local Government, taking over from James Brokenshire.
Robert Buckland replaces David Gauke as Justice Secretary.