Kushner, 35, who is married to Trump's daughter Ivanka, is taking the job after receiving legal counsel he would not be violating a US anti-nepotism law based on court rulings that the statute does not apply to the White House. The position does not require US Senate confirmation.
Ivanka Trump, who like her husband has been a trusted adviser to the president-elect, will not take on a role in her father's White House but will focus instead on settling her family in Washington.
Both of the Trumps will undertake significant divestments of their wide-ranging financial portfolios as they prepare for their move to Washington from New York and face inevitable questions about a potential conflict of interest.
Senior transition officials and a lawyer for Kushner laid out the arrangement in a conference call with a small group of reporters.
Kushner is to work closely with incoming White House Chief of Staff Reince Priebus and senior strategist Steve Bannon in advising the new president and the officials said he would focus at least in the beginning on trade policy and the Middle East.
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The incoming president has vowed to rewrite international trade deals to make them more favorable to the United States and has adopted a pro-Israel stance with a pledge to move the US Embassy in Israel to Jerusalem from Tel Aviv.
Jamie Gorelick, a New York lawyer who served as deputy attorney general for Democratic President Bill Clinton, helped advise Kushner on whether he would violate a 1967 anti-nepotism statute and said he would not.
"I'm not saying that there isn't an argument on the other side, and I respect the people who have made the argument on the other side. I just think we have the better argument," she said.
Gorelick said Congress in 1978 authorised the president to hire personnel for the White House office "without regard" to federal personnel laws like the anti-nepotism statute and that the Justice Department had described that authority as unfettered and sweeping.
"Even without that law, two D.C. Circuit decisions strongly suggest that the White House Office is not an 'agency' under the anti-nepotism statute, a position supported by the views of the Justice Department under Presidents Bill Clinton and George W. Bush," Gorelick said.
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Divestments
In order to comply with federal ethics laws and after consulting the Office of Government Ethics, Kushner will take a number of steps to divest substantial assets, Gorelick said.
Kushner will resign from his positions as chief executive of the Kushner Companies and as publisher of the New York Observer newspaper and divest from any interests in the New York Observer, Thrive Capital, 666 Fifth Avenue and any foreign investments.
In addition, Kushner will recuse himself from participating in matters that could have a direct effect on his remaining financial interests.
Those interests include real estate in the New York area, Ivanka Trump's interest in the new Trump hotel in Washington and the Ivanka Trump Brand fashion business, the officials said.
Ivanka Trump will not participate in the management or operations of the Trump Organisation or the Ivanka Trump brand or fashion business.
She will divest significant assets including all common stock and resign from all officer and director positions she holds in the Trump Organisation.
