Late switch leads to new top economic adviser

But Mr Barrett declined the position and has instead taken on the top job at his current workplace, the Victorian government's Department of Treasury and Finance.

He will replace the outgoing secretary David Martine, who has stepped down after almost a decade in the job.

Ms Wood will head the commission for the next five years, Treasurer Jim Chalmers said.

"Ms Wood will be the first woman to lead the Productivity Commission or any of its predecessor agencies that stretch back for more than a century," he said.

The CEO of the respected Grattan Institute has an honours degree in economics from Adelaide University and masters degrees in economics and competition law from Melbourne University.

She was previously principal economist and director of merger investigations at the Australian Competition and Consumer Commission, a senior economist at NERA Economic Consulting and a senior research economist at the Productivity Commission.

Ms Wood is president of the Economic Society of Australia and co-founder of the Women in Economics Network.

She said she was honoured to be offered the position, but sad to be leaving the Grattan Institute.

"My time at Grattan has been the most exhilarating, challenging and fun of my career," she said. 

A pressing task will be modernising the independent body in line with the Albanese government's agenda to overhaul of key economic institutions.

This started with a major shake-up of the Reserve Bank of Australia, including a dual-board structure for setting monetary policy and running day-to-day operations.

Dr Chalmers said the new commissioner would be tasked with kickstarting sluggish productivity growth. 

"It is partly global, it is partly a consequence of the wasted decade and missed opportunities, which meant that productivity growth in the 10 years to 2020 was the slowest decade in the last 60 years," he said.

Shadow treasurer Angus Taylor said he had great respect for Ms Wood, but questioned the appointment after she was recently picked to sit on an expert panel advising the Albanese government's competition review.

"This really does tell you what mayhem there is in this government's competition policy at a time when we need lower prices, not higher prices," he said.