Chatterjee, a 1974-batch officer of Uttar Pradesh cadre, is returning after a stint with the World Bank and will be joining as Secretary in the Prime Minister's Office, sources said.
He will replace M N Prasad, who is joining the World Bank, but will have greater powers like dealing with the Cabinet and appointments, the sources said.
Chatterjee is considered close to the Gandhi family and his appointment is expected to help in better coordination between the PMO and Congress President Sonia Gandhi.
B V R Subramanyam, an IAS officer of Chhattisgarh cadre who served as Private Secretary to Prime Minister Manmohan Singh in UPA-I from 2004 to 2008, is also set to return to join the PMO as Joint Secretary. He will replace Vini Mahajan.
Senior IFS officer Pankaj Saran is also on the way out of the PMO. A Director-level reshuffle is also underway.
IFS officer Sudhakar Dalela, serving as Director, is leaving PMO for a posting in the Indian Embassy in Washington.
Another Director Ashish Gupta, an IAS officer from Uttar Pradesh cadre, is going back to his home state.
D P S Sandhu, who is also serving as Director in the PMO, is heading to the World Bank too for an assignment.
In their place, the PMO is getting Sanjay Lohia, IAS officer from Assam cadre and Kishen Kumar, IAS officer from Punjab cadre.