Collins served as shadow transport secretary and as shadow education secretary in the last parliament. Before entering the Commons in the Labour landslide of 1997, Collins served as press secretary to prime minister John Major and as member of the Downing Street policy unit.
The hire will be seen as a coup for Bell Pottinger at a time when heavyweight Tories are in short supply.
Collins starts the new role next week and will work closely with agency chair Peter Bingle. He replaces David Sowells, who is to take up a new role in Washington working for Bell Pottinger USA.
Following his election as an MP, Collins went on to become shadow transport secretary under Iain Duncan Smith's leadership of the Conservative Party, then shadow education secretary under Michael Howard.
At the 2005 general election, Collins lost his seat to Liberal Democrat Tim Farron and has been running the family business since then.