Owen Smith is set to be appointed shadow secretary of state for Northern Ireland, the New Statesman has learned.

Several well-placed Westminster sources said Smith, who unsuccessfully challenged Jeremy Corbyn for the Labour leadership last summer, will be given the portfolio rather than former shadow Northern Ireland secretary Vernon Coaker when the leader of the opposition reshuffles his shadow cabinet today, pending appointments to junior positions.

Unlike most posts in the shadow cabinet, the job is vacant – Dave Anderson, the most recent incumbent, retired when Theresa May called the general election. With the Conservatives on the brink of agreeing terms for a confidence and supply deal with the DUP's ten MPs and Northern Ireland's devolution settlement in jeopardy, the brief will take on a much higher profile than usual in the next parliament.

Smith, who resigned as shadow work and pensions secretary in the aftermath of the EU referendum last June, would likely be the most high-profile Corbynsceptic to return to the Labour front bench (he said last week that he had been "clearly wrong" about Corbyn's abilities). And though Coaker – who until news broke of Smith's likely appointment was considered to be frontrunner for the brief – is widely liked and respected by the Northern Irish MPs at Westminster, Smith, a former special adviser in the Northern Ireland office between 2002 and 2005, is considered a natural fit for the role.

He does, however, have a much lower profile in the province than Coaker – who, crucially, forged a close working relationship with the DUP's parliamentary party in his two terms as shadow Northern Ireland secretary under Ed Miliband and Corbyn.

Former Northern Ireland secretary Paul Murphy told the BBC last year that Smith had been a "brilliant" presence during the peace process. The Pontypridd MP also served as a special adviser in the Welsh Office and as shadow secretary of state for Wales, which sources said would likely equip him well for the role.