Mr Coleman will not have a cabinet position and will still be located within the Home Affairs portfolio, led by Mr Dutton.
“Mr Dutton … will be focusing on everything from cybersecurity to law enforcement, border protection, security agencies, and he will have his focus more principally on those security tasks,” prime minister Scott Morrison said.
The prime minister’s office told SBS News that means Mr Dutton will still oversee the Australian Border Force – the agency that carries out visa compliance checks and runs Australia’s detention centres.
Labor’s shadow immigration minister Shayne Neumann said he hoped Mr Coleman could “clean up the failures of Peter Dutton” and address growing wait times for visa approvals.
“The Minister responsible for one of the most complex areas of policy – including Australia’s permanent migration intake, our humanitarian program, and temporary work visas – won’t have a voice in Cabinet,” Mr Neumann said.
Ai Group, a leading business organisation, welcomed the division of the ministries.
“The effective separation of the Immigration department to stand alone in the new arrangements is a sensible move which will allow for a high priority to be given to this economic portfolio,” CEO Innes Willox wrote in a statement.
“Customs is an area which business would also like to see sensibly returned to a stand-alone capacity but that may be something for another day.”
SBS News has put a series of questions to the Home Affairs department but understands the immigration department will not be separated.
Questions remain over whether Mr Coleman will take over the ministerial powers in the Migration Act, including the ability to cancel visas. More details are expected in coming days as the remainder of the Morrison ministry is sworn in at Government House.
Mr Dutton was sworn in at an early ceremony on Monday so he can attend an upcoming intelligence and security meeting on the Gold Coast.
He said he was “pleased” Mr Coleman would take over immigration “as there is a significant body of work underway in that area”.
Former citizenship minister Alan Tudge will take on population and infrastructure, which Mr Morrison said was all about "congestion busting" in the capital cities.