His official start date as head of the division has yet to be announced, given that it is “still in the process of being established”, Barclays said.
But a spokesman said Cheshire would take up the position some time between April this year and January 2019 – the deadline for retail bank operations to be separated.
The lender is being forced to isolate its retail operations under new regulations that require UK banks to protect customers and business clients from more risky investment divisions. The new Barclays Bank will comprise retail and business banking, consumer credit and wealth management businesses.
Cheshire has also been appointed a non-executive director of Barclays starting 3 April, but will stay on as chairman of Debenhams, having been appointed in April last year.
He currently serves as a senior independent director of Whitbread and holds directorships at decor and furniture company Maisons du Monde and investment firm Menhaden Capital.
Cheshire stepped down as chief executive of B&Q and Screwfix-owner Kingfisher in January 2015 after seven years in the position. He spent 17 years in total at the home improvement retailer.
Barclays’ chairman John McFarlane said: “He will be a strong addition to the Barclays’ boards. Identifying a chairman for Barclays UK is, of course, an important step on our journey to establish our UK ring-fenced bank and I welcome the opportunity to work closely with Sir Ian as we take Barclays forward in its new structure.”
The bank did not release details of Sir Ian’s remuneration package. His appointment comes just days after HSBC named Ian Stuart, the head of commercial banking for the UK and Europe, as the head of its own UK retail bank.
The head office of HSBC’s UK retail banking operations is being relocated from London to Birmingham as part of ring-fencing plans.
Last week Barclays reported a surge in annual profits, which nearly trebled to £3.2 billion from £1.1bn a year earlier, thanks to a boost from its investment banking arm, as well as lower fines and mis-selling charges.
Chief executive Jes Staley said the bank was “just months away” from completing its overhaul after selling down and offloading unwanted businesses to focus on US and UK operations.