Nicole Feely, who worked briefly as a public affairs director for the global tobacco giant Philip Morris, will replace outgoing director-general Peggy Brown, who announced her intention to resign in February after five years

A former partner for health at consultancy firm KPMG, Ms Feely has also served as chief executive of Western Australia's South Metropolitan Health service and Victoria's St Vincent's Health.

After working with the Sydney Olympic Games organising committee and the Victorian Employers' Chamber of Commerce and Industry, Ms Feely quit to gain corporate experience with a multi-national company in 2001.

She worked for four months at Philip Morris, one of the world's largest tobacco companies.

Health Minister Simon Corbell said her tenure with the company had been fully disclosed at the start of the government's recruitment process for the director-general's role. The Philip Morris job is not listed in Ms Feely's online resume.

He said her employment with the tobacco company had been terminated, but said it was because she had felt "deeply uncomfortable working in that environment".

"There has been full disclosure in relation to this matter and I in no way see it as a hindrance.

"I think it speaks to her integrity that she considered she could not continue to work for an organisation like Philip Morris," Mr Corbell said.

Ms Feely has previously described joining the company as "a considered decision".

"I did not have philosophical issues with the company because they had changed their tune on tobacco, admitting its dangers," Ms Feely said in a 2004 interview, conceding she did not fit in.

After Mr Howard's 1996 election win, she became the first woman to run an Australian prime minister's office.

She served until June 1997, ending five years with Mr Howard, during which time she attracted both criticism and praise in the national media.

She became renowned for a relentless work ethic and was described as both "fearless" and "ferocious".

Her appointment to ACT Health comes after sustained criticism of the directorate and management inside some units of Canberra Hospital.

While Dr Brown's background is in medical practice and as a former ACT chief psychiatrist, Ms Feely is a former barrister with experience in industrial, commercial and criminal law.

She is a graduate of Melbourne University Law School and Curtin University.

In August 2013 Ms Feely resigned her role overseeing a series of major Western Australian public hospitals amid concerns over cost blow outs and development delays.

She will take over from Dr Brown in "coming months", the government said.

Chief Minister Andrew Barr signalled last year he would seek to rein health spending, representing about a third of the government's budget and growing at 5 per cent.

"It will be a privilege to lead ACT Health over the coming years and together with my team, we will work to find constructive and practical solutions to the challenges facing the service whilst striving on a daily basis to deliver a quality, patient focused health service for the people of the ACT and its regions," Ms Feely said in a statement.

The appointment comes after management processes and cultural problems were highlighted at Canberra Hospital and after this week's dispute over bed numbers at the new University of Canberra public hospital.

In November, Canberra Hospital's head of obstetrics and gynaecology quit his position after allegations of mismanagement and long-running bullying allegations. A leaked internal report warned mismanagement problems inside the hospital's maternity unit had put the health of patients at serious risk.

The hospital's training program was given a six-month warning over accreditation standards. Dr Brown defended the unit and refused to release the assessment report.

Opposition Leader and health spokesman Jeremy Hanson welcomed the appointment and said he looked forward to developing a good relationship.

"I'm sure we both share the same desire to fix an ailing health system," Mr Hanson said.