Iran's supreme leader has appointed former president Mahmoud Ahmadinejad to the Expediency Council, the country's top political arbitration body headed by an avid critic of the outgoing president.

In announcing the appointment on Monday, Ayatollah Ali Khamenei praised Ahmadinejad's "worthy efforts" as president.

Ahmadinejad vacated office on Saturday after two turbulent four-year terms.

He was succeeded by moderate cleric Hassan Rouhani, who has promised to engage constructively with world powers over Iran's contentious nuclear drive and to stave up the shrinking economy.

"Considering the profuse experience you gained during eight years of worthy efforts, I appoint you as a member of the Expediency Council," read a statement posted on Khamenei's website.

In the last two years of his presidency, Ahmadinejad fell from grace with Khamenei following a public power struggle, and during his tenure he was also involved in high-profile feuds with parliament speaker Ali Larijani and judiciary chief Ayatollah Sadeq Larijani.

The council is headed by ex-president Akbar Hashemi Rafsanjani who repeatedly criticised Ahmadinejad during his turbulent eight-year presidency for his controversial political and economic policies.

It is dominated by conservatives and acts as an advisory body for Khamenei, the supreme leader of Iran who has final say on all key policies, including nuclear talks and foreign policy.

Any differences between the parliament and the Guardian Council are adjudicated by the Expediency Council, which comprises high-ranking religious and political figures and former government officials.