A "full statutory inquiry" will be held into the contaminated blood scandal which left 2,400 people dead, the Government has said.
It comes after victims and families of those affected raised concerns about the potential involvement of the Department of Health in the probe.
The Cabinet Office will now lead the inquiry into the events of the 1970s and 1980s when thousands of haemophiliacs and other patients were given blood products infected with hepatitis C and HIV.
Prime Minister Theresa May ordered the inquiry earlier this year, saying she wanted "justice" for the victims and their families.
Downing Street said it had considered the "strong view" that the Department of Health should not be responsible for the probe when it is under investigation itself.
The Prime Minister's official spokesman said: "The inquiry will be conducted under the responsibility of the Cabinet Office rather than by the Department of Health with immediate effect.
"We have been absolutely clear of our determination to establish what happened in relation to the contaminated blood scandal of the 1970s and 1980s and to work with the families of those affected, and we are now moving forward with that process."
Campaigners and families of those affected by the scandal boycotted a meeting with Department of Health officials earlier this year in protest at its involvement in the inquiry.
Cabinet documents obtained by Sky News revealed senior ministers in the 1987 Conservative Government pursued a deliberate policy of not accepting any responsibility for the scandal and tried to limit its financial liability to victims – despite privately acknowledging it could not "refute convincingly" the allegation that it was at fault.
Downing Street said there had been around 800 responses to a consultation which asked families and victims if they wanted a judge-led inquiry into the scandal or a Hillsborough-style panel.
A further announcement about the probe is expected before the end of the year.