A Scottish Conservative MEP is to be made a Lord so he can become the new Scotland Office Minister.
Ian Duncan, who was elected to Brussels in 2014, will be given a life peerage so he can take on the role.
The appointment comes despite the Scottish Conservatives having their best general election result in more than three decades, with 13 Tory MPs returned to Westminster from north of the border.
Read more: Independence referendum plans statement 'likely' before Holyrood recess
Mr Mundell, who for years was the only Scottish Conservative MP, will continue his role as Scottish Secretary in Theresa May's cabinet.
And he said Mr Duncan's work in the European Parliament would help ensure the "best deal for Scotland" in Brexit negotiations.
The Scottish Secretary said: "Ian Duncan is an experienced and capable politician, with significant experience in Brussels and an excellent understanding of fishing and farming issues.
"His appointment as UK Government Minister for Scotland will greatly strengthen our ability to get the best deal for Scotland and the rest of the UK as we leave the EU.
"I look forward to working with him over the coming months and years."
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Mr Duncan succeeds Lord Dunlop, who stepped down from the government after the general election - and who also was given a peerage to allow him to take on the job.
The new minister said: "This is a crucial time for Scotland, as we start our negotiations with the EU and look at how we bring powers back to the UK in a way which strengthens our economy.
"Having worked in Brussels for many years as an MEP, and previously as an EU adviser to the Scottish Parliament, I understand how important it is that we build a new partnership with the EU, while making sure that whole of the UK gets the best possible deal, especially around crucial issues for Scotland such as fisheries, agriculture and energy.
"Working alongside Scottish Secretary David Mundell, and in close collaboration with the Scottish Government, I look forward to playing a key role in helping build Scotland's economy and strengthen the Union.
"We are in a strong position to deliver for Scotland."
Mr Duncan came within 21 votes of ousting veteran SNP MP Pete Wishart in the snap general election, reducing the nationalist majority in Perth and North Perthshire from 9,541 in 2015.
Read more: Independence referendum plans statement 'likely' before Holyrood recess
He was born in the constituency in Alyth in 1973, and joined the Conservative Party while at St Andrews University, where he gained a degree in geology, before going on to complete a doctorate at Bristol University, where he taught following his studies.
He worked as a researcher for BP before taking on a series of public affairs positions in Scotland, including secretary of the Scottish Fishermen's Federation and head of policy & communications with the Scottish Refugee Council.
He spent seven years at the head of the Scottish Parliament's office in Brussels, and later served as European adviser to the Parliament and clerk to the European and External Relations Committee before resigning in 2013 to seek election as an MEP.
Scottish Conservative leader Ruth Davidson said: "Ian brings huge experience from the European Parliament on a whole host of issues including farming, fishing, the environment, and oil and gas.
"He will be a major asset in the Scotland Office as we seek to make Brexit work for us all in Scotland."
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