Channel 4 drama chief Tessa Ross is to head its new film division FilmFour, the broadcaster confirmed on Wednesday.

Ross will step down as head of drama to focus on film, a move seen as crucial in proving that the channel is committed to film after closing down its stand-alone operation under Paul Webster and moving in-house. Many had feared that the massively scaled-down film operation and its annual budget of $16m (£10m) would be swallowed up by the drama department if Ross were to oversee both.

But Ross, who takes on the role with immediate effect, will only stay on as head of drama until a replacement is appointed. She will report directly to Channel 4 chief executive Mark Thompson.

"She will be relinquishing her role as head of drama," the channel said. "There will be an entirely separate film department."

Ross spent three years as head of development for erstwhile Euro-centric funding body British Screen Finance in the early nineties. She has an executive producing credit on rival BBC Films' Billy Elliot from her time as head of drama for the BBC's now defunct Independent Commissioning Group.

At Channel 4, which has said it wants to return to its low-budget roots of films such as My Beautiful Laundrette and Letter To Brezhnev, Ross has been involved with dramas and films such as Ken Loach's The Navigators, Stephen Frears' Liam and White Teeth, the adaptation of Zadie Frost's acclaimed book.

Thompson said: "Tessa's knowledge and love of film making, her formidable track record both in television drama and film, her understanding of Channel 4's aims and values and her unrivalled contacts book, combine to make her the ideal candidate to lead the rebirth of FilmFour."

Ross' closest rival to the post seems to have been producer Andrea Calderwood, although former Universal Pictures executive Graeme Mason became a surprise late candidate when the broadcaster was apparently considering a more commercial approach.

Projects surviving at the broadcaster from the old regime include titles from directors Lynne Ramsay and Jonathan Glazier and an option on Toby Young's book How to Lose Friends And Alienate People.

"I'm delighted to be offered the chance to write the next chapter in Channel 4's long and distinguished film-making history," Ross said. "Channel 4 remains a major investor in film and I'm confident we can go on to produce the kind of cutting-edge British films that have been so central to the channel's cultural and creative success in the last 20 years."