UPDATED 5.49PM: Parliament's worst kept secrets have officially been confirmed - Judith Collins is back in Cabinet, while Tim Groser is leaving for the US.

MORE: Judith Collins - I'll still be a straight shooter

The confirmation comes just before the Prime Minister's post-Cabinet press conference.

Collins is picking up the Police and Corrections portfolios.

Current Corrections Minister Sam Lotu-Iiga has faced criticism for his handling of ongoing problems with private prison contractor Serco - which Collins introduced into the system five years ago.

Lotu-Iiga will now become Local Government Minister. 

"I say what I mean, and if I say I'm going to do something and I do, I'm just going to get on going and I'm very grateful for the opportunity to do so," Collins told Newstalk ZB just prior to the announcement. 

Collins resigned from the Justice portfolio during last year's election when emails stolen from blogger Cameron Slater implicated her in a campaign to undermine the position of former Serious Fraud Office head Adam Feeley.

Collins was cleared in an inquiry by a retired High Court judge more than a year ago - after Prime Minister John Key had picked his third-term Cabinet.

Key said it was not a reflection on Lotu-Iiga's handling of problems with the prison contractor.

"To be blunt, I know that that will be the way people interpret it but actually my bigger issue was I wanted to make sure the portfolios Judith was picking up were the ones I thought suited her natural areas," Key said. 

The Prime Minister did discuss the reappointment with some very senior Ministers who are in his circle of trust, but he wasn't "going to detail all of the discussions we had because it wouldn't be appropriate for me to do that, but I don't tend to live in a vacuum and I don't tend to make decisions on my own."

Collins will wait until she's in her ministerial seat before addressing Serco itself.

"Serco's already running as well a second prison which is the prison at Wiri, and what I'm hearing from people is that that is going very well so I'm going to wait until I've been sworn in, get my briefings and to find out exactly what's going on," she said. 

In other reshuffles, current Trade Minister Tim Groser is becoming the Ambassador to the United States. 

He will resign his seat, to be replaced as an MP by West Coast list member Marueen Pugh.

Todd McClay will take over the Trade post, handing the Revenue portfolio to Michael Woodhouse.

Paula Bennett will take over the Climate portfolio. 

ACT leader David Seymour turned down the positions of Minister for Regulatory Reform, and Associate Minister of Education in order to focus on his attempts to introduce euthanasia legislation.