The transition committee of South Korea's President-elect Yoon Suk-yeol named Han Duck-soo on Sunday to become prime minister in the new administration, restoring him to a role he last held more than a decade ago.

The 72-year-old Han has expertise in economy, trade and public affairs, and was prime minister during the Roh Moo-hyun administration from April 2007 to February 2008.

He spent more than 40 years in the public sector, including the customs agency, trade ministry and finance ministry. He also served as an ambassador to the United States.

"He has built a wealth of experience in economy, trade and diplomacy ... and is considered the right person to carry out state affairs," President-elect Yoon said as Han stood alongside him at a news conference.

Han said the economy was struggling amid heightened economical and geopolitical risks as he listed four main tasks to be addressed; managing foreign and defence policies, achieving fiscal soundness, while keeping a healthy current account surplus and raising national productivity.

The prime minister in South Korea, unlike some others, is appointed by the president, rather than being elected, and must be approved by parliament.

The position is largely administrative but the prime minister oversees ministries, deliberates major state affairs and acts on behalf of the president.

The nomination comes as Yoon from the opposition conservative party is set to take office next month.

Yoon is a former prosecutor general who has never held elected office before but Han's experience working on both sides of South Korea's partisan divide is expected to play a crucial role in helping the incoming administration reshape the political future of Asia's fourth-largest economy.

Previously, Han led the nation's free trade agreement with the United States and talks with Pyongyang in 2007 where the two discussed details of a massive aid package to help rebuild the impoverished North's infrastructure.

Incoming Yoon faces challenges to curb runaway home prices and rising household debt amid inflationary risks and a growing wealth gap, while he also faces headwinds from global supply disruption and higher energy prices.

That adds to the already complicated situation for Yoon as outgoing President Moon Jae-in's Democratic Party holds nearly 60% of 295 seats in the National Assembly.

(Editing by William Mallard, Jacqueline Wong & Simon Cameron-Moore)