The former UK prime minister will join the European Council on Tolerance and Reconciliation (ECTR), a Brussels-based organisation dedicated to tackling racism, xenophobia, anti-Semitism and tougher laws on extremism.
Blair, 62, stepped down as the Middle East envoy representing the US, Russia, the UN and the EU last week.
He will not be paid in his new role, but his Faith Foundation will reportedly receive an annual donation.
It has called on European countries to bring in legislation creating clearer definitions of racism and anti-Semitism, boost educational programmes and make Holocaust denial a criminal offence.
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The organisation also wants governments to provide security at synagogues and Jewish schools.
Writing in 'The Times', Blair and Moshe Kantor, a Russian-born businessman who co-founded the ECTR in 2008, said Europe was facing "dangerous times".
They said "economic decline fuels instability", noting that the only three times in the past 100 years when the annual GDP growth in Europe went below 1 per cent was just before World War-I, World War-II and last year.
They cited the Northern Ireland peace process, which Blair was involved in, as a "prime example" of a situation from where lessons can be learnt.
Blair is taking over from former Polish president Aleksander Kwasniewski as chairman of the ECTR.
He will head a board that includes former Spanish Prime Minister Jose Maria Aznar and ex-Swedish PM Goran Persson.