Speaking on the matter, Union Rural Development Minister Jairam Ramesh said: "She will appear in ad campaigns to propagate construction and use of toilets."
He said Balan is the first brand ambassador of the Ministry.
Ramesh said that Vidya's involvement will make the campaign to end open defecation a national obsession.
Balan said: "This role will work a lot because they are working on a national movement."
"It is a matter of great honour for her to become the brand ambassador of sanitation campaign," she said.
She has agreed to give her time for the campaign for two years and will be fully involved in the Nirmal Bharat Abhiyan--the restructured version of the Total Sanitation Campaign.
It may be recalled that India loses 54 billion US dollars that is about 24,000 crore rupees a year due to poor sanitation and hygiene.
According to UNICEF-WHO Joint Monitoring Programme Report 2010, nearly 60 per cent of India's 1.1 billion people still practice open defecation and close to 58% of all open defecations in the World is in India.