Mr Rennocks, 50, takes over as executive director, finance, at British Steel on 16 July, and will join the board a week later at the conclusion of the annual meeting.
There is speculation that Mr Rennocks' departure after six years at PowerGen is linked to his disappointment at not being promoted to managing director at the time of the resignation by the chairman, Sir Colin Southgate.
PowerGen's chief executive, Ed Wallis, moves up to executive chairman when Mr Southgate stands down at the annual meeting in July. His duties will be taken on by Deryck King, managing director, who joined the board from ICI in March.
At British Steel, Mr Rennocks will be paid a basic salary of pounds 200,000 plus a performance-related bonus worth up to 30 per cent. Before joining PowerGen in its run-up to flotation, Mr Rennocks was finance director at Smith & Nephew, the healthcare group.