The appointment was made by prime minister Tony Blair and was endorsed by the Commission for Architecture and the Built Environment. Sir Stuart Lipton, chairman of CABE, said Falconer was the ideal man for the job, but warned that he had much work to do.
He said: "It is coming up to a year since the PM launched his Better Public Buildings initiative. We have come a long way since then, but the results on the ground are still mixed."
CABE is known to have been impressed by Falconer's opinions on the built environment and his commitment to improving delivery in the planning system since he moved to the DTLR in June.
"We need leadership from the top of all the government departments to drive this change," Lipton added.
One of Falconer's principal responsibilities will be to oversee the delivery of public buildings procured by private finance.
Ministers on the design champions committee include construction minister Brian Wilson and Baroness Blackstone, minister at the Department for Culture, Media and Sport.