Former FBI boss Robert Mueller has been named as a special prosecutor to oversee a probe into Russia’s alleged interference in the US election.
Deputy Attorney General Rod Rosenstein said it was “in the public interest” to bring an outsider in to oversee the investigation.
Calls for a special prosecutor have mounted since President Donald Trump fired the FBI director last week.
The move has been widely praised by politicians from both sides.
Mr Mueller is a former prosecutor who served as FBI chief from 2001 to 2013.
“Based upon the unique circumstances, the public interest requires me to place this investigation under the authority of a person who exercises a degree of independence from the normal chain of command,” Mr Rosenstein said in a statement.
The FBI investigation is also looking into potential links between Mr Trump’s campaign team and Russia.
But Mr Rosenstein added that his decision was not a “finding that crimes have been committed or that any prosecution is warranted. I have made no such determination”.
Mueller has wide powers – Anthony Zurcher, BBC News, Washington
In announcing the appointment of a special counsel, Deputy Attorney General Rod Rosenstein cited the “unusual circumstances” of the ongoing FBI Russia investigation. That’s an understatement.
The circumstances aren’t just unusual, they’re unprecedented. The nation has never had an administration so embattled so early in its term. There’s never been such grave allegations of electoral meddling by a foreign power in a US presidential election.
Then again there’s never been a president quite like Donald Trump.
Now the Russia story enters a new, more serious phase. Robert Mueller has a sterling reputation in Washington, DC. He worked with James Comey when the recently sacked FBI director served as deputy attorney general in the George W Bush administration. He understands pressure-cooker politics and knows how to navigate the corridors of power.
He has wide latitude to conduct his investigation and bring criminal charges, if necessary.
While Mr Mueller is technically still part of the Justice Department and ultimately reports to Mr Trump, his stature is such that he is unlikely to be cowed by the president.
Independent investigations often take on a life of their own and can reach unexpected conclusions. With Mr Mueller in the game, the stakes just went up.
The White House has been engulfed in controversy following a string of controversies including Mr Comey’s abrupt dismissal and allegations that Mr Trump asked the ousted FBI chief to drop an inquiry into links between his ex-national security adviser and Russia.
Mr Trump’s national security adviser Michael Flynn was forced out in February after he misled the vice-president about his conversations with Russia’s ambassador before Mr Trump took office.
The White House has denied it put pressure on Mr Comey but the revelations fuelled Democratic claims that Mr Trump tried to conceal his team’s connection to Russia.
Mr Mueller, 72, served as FBI director under Presidents George W Bush and Barack Obama as the longest serving bureau chief since J Edgar Hoover.
He is expected to announce his resignation from a private law firm to avoid conflicts of interest.
An order signed by Mr Rosenstein on Wednesday said Mr Mueller would investigate “any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump” and “any matters that arose or may arise directly from the investigation”.
“If the special counsel believes it is necessary and appropriate, the special counsel is authorized to prosecute federal crimes arising from the investigation of these matters,” the order read.
Mr Rosenstein assumed the role to oversee the Russia probe after Attorney General Jeff Sessions recused himself from any investigation involving Moscow.
The White House used a memo written by Mr Rosenstein, who argued that Mr Comey botched an inquiry into Hillary Clinton’s emails, as one of the reasons for the FBI chief’s sacking.