In a statement, Abbott said he was pleased at the appointment.
“It’s important for the wider world that Britain make the most of its post-Brexit opportunities and I am proud to be playing a part,” Abbott said.
“The world especially needs arrangements that boost prosperity at a time like this and I am only too keen to help.”
The appointment has set off a major political dispute in Westminster, with cabinet ministers forced to defend claims that the former Liberal Party leader was a “homophobe and misogynist”.
Abbott’s former chief of staff, Peta Credlin, and his sister, Christine Forster, defended the former prime minister on Friday, rubbishing claims from some journalists and British MPs that his previous statements disqualified him from the trade role.
Forster, who is gay, hit back at descriptions of her brother as homophobic and misogynistic.
“As a woman who has always been part of his life and who came out to him as gay in my early 40s, I know incontrovertibly that Tony is neither of those things,” she said.
Prime Minister Boris Johnson on Friday said he did not agree with many of Abbott’s former comments.
“I obviously don’t agree with those sentiments at all but then I don’t agree with everyone who serves the government in an unpaid capacity on hundreds of boards across the country and I can’t be expected to do so,” Johnson said.
“What I can say about Tony Abbott is this is a guy who was elected by the people of the great, liberal, democratic nation of Australia. It’s a freedom loving country, it’s a liberal country. I think that speaks for itself.”
Asked what his fiance Carrie Symonds thought of Abbott, Johnson replied: “Pass.”
Brexit Party leader Nigel Farage praised the government’s decision: “Very pleased that the cancel culture did not succeed with Tony Abbott.”
Abbott’s position will be unpaid, however the UK government is likely to cover the costs of his travel and expenses. It is not known whether the position will require him to register as an agent of foreign influence under Australia’s foreign influence transparency scheme.
Secretary of State for International Trade Liz Truss said the board would talk with industry, communities, farmers and consumer groups in Britain “to ensure a range of voices are heard as the UK develops its independent trade policy”.
“The new Board of Trade will play an important role in helping Britain make the case for free and fair trade across the UK and around the world,” she said.
Abbott wrapped up a 10-day trip to Europe on Friday and was on his way back to Australia where he said he would go into hotel quarantine.
Actor Sir Ian McKellen led fresh calls on Friday for Johnson to walk away from appointing Abbott to the revamped trade board because of previous statements on abortion, climate change, gay people and women.
McKellen, who played Gandalf in Peter Jackson’s remake of the hit trilogy The Lord of the Rings, released an open letter calling on Britain’s arts community to support and sign.
The letter has so far been signed by a string of prominent gay and lesbian figures in Britain, including Lord Cashman and Lisa Power, fellow founders of the Stonewall LGBT rights charity, and screenwriter Russell T. Davies who revived Doctor Who and wrote Queer as Folk.
The list of those who have signed already is notable as it includes figures who rarely speak out on politics when it does not relate to their particular sector, including Ian Green from the Terrence Higgins Trust, Britain’s leading HIV and sexual health charity.
It also includes a Tory peer, Lord Hayward, who has become the second Conservative to voice disquiet about the appointment.
Australian actor David Wenham, who co-starred with McKellen in The Lord of the Rings, said: “Britain must feel very despondent if their government deems that there is no one in Britain capable of representing them re trade.”
Prime Minister Scott Morrison has described Abbott’s new role as a “good hire”.
“He knows a lot about trade and he did a lot of great work for Australia on trade when it came to the China free-trade agreement and Japan and Korea,” Morrison told reporters in Canberra on Friday.
Australia’s high commissioner to Britain, George Brandis, offered “warm congratulations” to Abbott, who is a friend.
“Tony brings experience, expertise and enthusiasm to a role that strengthens our bilateral ties,” Brandis said.
Bevan Shields is the Europe correspondent for The Sydney Morning Herald and The Age.
Latika Bourke is a journalist for The Sydney Morning Herald and The Age, based in London.