Former Army Commander Field Marshal Sarath Fonseka has agreed to become the "Overall Commander" of the defense forces.
The former Army Commander had expressed willingness to accept offer following a request made by President Maithripala Sirisena.
However, Fonseka had said he needed "necessary powers" to operate in the position and discharge his duties.
He has expressed the same sentiments at the Cabinet meeting, chaired by President Sirisena, yesterday.
Highly placed government sources said the President and the Prime Minister would have to make final decisions on the scope of Fonseka's new role.
Addressing the Cabinet briefing this morning, Cabinet Spokesman Minister Rajitha Senaratne said the President made the request to restore discipline in the country, especially in the wake of recent trade union actions.
Fonseka is likely to step down from his Parliamentary seat and the ministerial portfolio to take up the new position, government sources added.