Ms Reeves became Chancellor in 2024 when Labour swept to power in the general election.
Ms Reeves has introduced a number of spending and taxation reforms during her time as Chancellor including adding VAT on to private school fees, raising Employers' National Insurance and increasing the National Living wage substantially, particularly for younger workers.
She has also encouraged the FCA and other regulators to reduce the burden of regulation financial businesses.
It is not yet known what Mr Healey's priorities will be but Mr Burnham has talked about doing more to reduce the cost of living although potentially at the cost of tax rises.
Shaun Moore, tax and Financial Planning expert at Quilter, said: "In a surprise first cabinet appointment, former defence secretary John Healey has been confirmed as Chancellor of the Exchequer.
"Commentators had Shabana Mahmood as the front runner, with Ed Miliband a close second, but regardless of who had taken the title, the challenge for the incumbent remained the same. The UK tax system has become increasingly complex and subject to constant speculation. John Healey’s challenge is not just balancing the books, but creating a stable environment where people can plan for the long term without worrying that the rules will change again tomorrow.
"For savers and investors, the real test will not be the appointment itself but the policies that follow. One of the more encouraging developments in recent years has been the growing recognition within government that the UK needs a stronger investment culture. Too much wealth sits in cash when it could be helping individuals build long-term financial resilience while supporting economic growth. While we have not agreed with every proposal designed to achieve that goal, the broader ambition of encouraging more people to invest for the long term is absolutely the right one."
Mr Healey is the Labour Member of Parliament for Rawmarsh and Conisbrough in South Yorkshire and lives in Rotherham. Previous Cabinet positions include Secretary of State for Defence, Shadow Secretary of State for Defence, Minister for Local Government and Financial Secretary to the Treasury.
He became Parliamentary Private Secretary to former Prime Minister Gordon Brown in 1999 when Mr Brown was Chancellor.
He was born in Wakefield and went to the Lady Lumley’s Comprehensive School, Pickering, and then St Peter’s School in York followed by Christ’s College, Cambridge.
According to his website, he worked in the voluntary sector from 1984 to 1990 with the Royal National Institute for the Deaf, the Royal Association for Disability and Rehabilitation and MIND and has campaigned to improve rights and services for disabled people. From 1990 to 1994 he worked in communications for Issue Communications, a PR company, and the MSF Union. He was Campaigns Director for the TUC from 1994 to 1997. He is married with one son and lives in Rotherham.
• This is a developing story. Check back later and tomorrow for more details of the new Cabinet.