Peter Sands, who left the bank in June, will help the government navigate changes in the UK labour market according to the Financial Times.
However Sands won't have a direct role in financial regulation, and a formal appointment is yet to be made.
Sands lost favour with investors after StanChart suffered falling earnings over the last two years, amid an emerging market slowdown and a series of scrapes with regulators.
He's been replaced by Bill Winters, who is a former head of JP Morgan's investment bank, and widely admired across the City.
Winters has since overhauled StanChart's management structure, introducing a new team to streamline the running of the bank, and is due to set out a new strategy by the end of this year.