Her unofficial role has grown in recent weeks, and she was granted security clearance and a West Wing office, drawing scrutiny from some.
"I have heard the concerns some have with my advising the president in my personal capacity while voluntarily complying with all ethics rules, and I will instead serve as an unpaid employee in the White House Office, subject to all of the same rules as other federal employees," she said in a statement today.
She added, "Throughout this process, I have been working closely and in good faith with the White House counsel and my personal counsel to address the unprecedented nature of my role."
The White House released its own statement about the move, saying that it is "pleased."
"Ivanka's service as an unpaid employee furthers our commitment to ethics, transparency and compliance and affords her increased opportunities to lead initiatives driving real policy benefits for the American public that would not have been available to her previously," the White House statement read.
When her increased security clearance and West Wing office were announced, Ivanka Trump said, "There is no modern precedent for an adult child of the president."
At the time, Kathleen Clark, an ethics expert and a professor at Washington University, described the arrangement as "outrageous."
"This is extremely troubling because the White House seems to be pretending that it can treat somebody as a government employee — give them an office and responsibilities — and not be bound by government ethics standards," she said.
"They assert that she will voluntarily comply with government ethics standards. That means they think she doesn't have to comply," Clark continued.
Now she thinks that the formal title is "absolutely a step in the right direction."
"The most significant thing about today is the White House has walked away from the indefensible position that it had last week, that she didn't have to comply with ethics rules but she was doing so voluntarily. That 'voluntary' language was what really obscured the point. They were claiming that she had a choice to do it," Clark told ABC News.
In spite of the title, Ivanka Trump is not technically required to divest from her company, Clark said.
"She must either divest or recuse herself from any matters that can affect her financial interest. For example, half of her business is based on jewelry, so pretend the administration is weighing an enormous tax on jewelry. That's something she would not be able to be in the room for if she doesn't fully divest," Clark said.
ABC News political commentator Cokie Roberts said that "she is solving the ethics issue" with the title, as it forces her to comply with ethics rules.
The title formalizes her existing role, though she has been no stranger to the White House. She has been present for family events — like the various inauguration celebrations — as well as closed-door meetings and sit-downs with foreign leaders.
In February she met Canadian Prime Minister Justin Trudeau at the White House, where they were part of a roundtable discussion on female entrepreneurs, and she met Israeli Prime Minister Benjamin Netanyahu.
When German Chancellor Angela Merkel visited the White House earlier this month, Ivanka Trump was seated right beside her.
Ivanka Trump's involvement in business roundtable discussions could be attributed to her business background at her namesake fashion label and her father's real estate empire, but she has also had a say in other causes that she is passionate about.
When the president held a listening session about domestic and international human trafficking on Feb. 23, he started his remarks by thanking his daughter and then–senior counselor for economic initiatives Dina Powell "for working so hard to set this up."
ABC News' Alex Mallin contributed to this report.