Rod Marsh has replaced John Inverarity as Australia's chairman of selectors in a significant shake-up of the panel that comes as the team sits on top of the world rankings in both Tests and ODIs.

Former selection chief Trevor Hohns has returned to the national selection panel for the first time since 2006, alongside first-time selector Mark Waugh, while Inverarity and Andy Bichel have departed. The coach Darren Lehmann remains part of the group, which was reduced from five men to four when captain Michael Clarke withdrew from his selection duties before last year's Ashes series in England.

Inverarity stood down after nearly three years as chairman and although he told Cricket Australia he was prepared to continue on the panel, the board decided it was time for some new faces. Cricket Australia's chief executive James Sutherland said Inverarity had performed admirably since taking charge of the selection duties in October 2011.

"When John Inverarity took over as national selector the Australian Test team was ranked fourth in the world and its on-field performance was well short of where it is today," Sutherland said. "He leaves his post with Australian teams in a position of strength holding the number one ranking in Test and one-day international cricket. That reflects his commitment and the astute judgment he brought to the role at a challenging time for Australian cricket.

"After deciding to stand down as chair, he recently indicated that he was prepared to continue on the national selection panel for another 12 months if required. Directors determined that with John stepping down as chairman, it was the appropriate time to bring new personnel into the group.

"Rod Marsh is the right man to take on this important role having been a key member of the panel since 2011. His track record speaks for itself. He brings a wealth of experience to the position, having been a leading player, coach and most recently a selector.

"Throughout his days as a player he was the absolute embodiment of the baggy green cap and to this day is widely respected throughout the game. He has a great eye for talent and has strong relationships throughout international cricket."

Inverarity said that at the age of 70 he would continue to maintain his interests in education and cricket "in a more part-time manner". "For some months I have been clearly of the mind that the end of my contract period on 30 June was the right time for me to step down in favour of Rod Marsh to chair the panel," he said. "Rod is the ideal person in every respect to take over and I would like to wish he and Darren, along with Trevor Hohns and Mark Waugh the very best in their new roles.

"I have certainly enjoyed the role and the success of the Australian teams in recent months has been pleasing. I would like to congratulate Michael Clarke and the players, Darren Lehmann and his support staff, Pat Howard and my fellow selectors on the very good news that came through yesterday regarding Australia now being ranked number one in both Test cricket and ODI cricket."

The departure of Bichel, who joined the panel at the same time as Marsh in November 2011, means that there will be no fast bowlers contributing to Australia's selection discussions, a curious absence given the way the attack has been rotated at times in the past. However, Cricket Australia said in a statement that Bichel's term on the panel had "not been renewed".

Waugh confirmed last month that he had been approached by Cricket Australia for a possible selection role and his presence as a BBL commentator for Channel 10 appears not to have prevented him from taking on the part-time position. Sutherland said Waugh would pay particular attention to the shorter formats, which would be crucial with a World Cup to be held in Australia and New Zealand next year.

"We think Mark will bring great experience to the role," Sutherland said. "His particular focus will be on our limited-overs program. He was one of the world's greatest one-day international players. We think he can add a lot, particularly in an important World Cup year."

The return of Hohns to the panel comes after he spent 13 years as a national selector from 1993 to 2006, including a full decade as chairman of the panel. For the past three years, Hohns has been Queensland's state talent manager and chairman of selectors, a role that he will relinquish when he rejoins the national panel. His time with the Bulls was significant in that he worked closely with Lehmann, building on a relationship that was more distant when the latter had his international career ended by Hohns' selection panel.

"I took on selection responsibilities with Queensland a couple of years ago and really enjoyed doing it again," Hohns said. "During that time I worked closely with Darren Lehmann where we developed a good working relationship. So to have the chance to work together again at a national level, along with Rod and Mark will be great. I'm genuinely looking forward to it. I enjoy the role and the responsibilities that go with selection and making a contribution to Australian cricket."

Like Hohns, Marsh will give up an existing role as part of the selection revamp, with Cricket Australia set to begin the search to find a replacement for him as CA's manager of elite coaching development. Marsh has been given a three-year term as chairman of selectors, which will begin when the new panel officially starts on July 1.