The new operating division, called natural resources, covers water, hydrocarbons & chemicals, nuclear process and waste sectors.
The move was presented as a move to integrated services for customers rather than a cost-saving measure.
Managing director of the new division is Mark Rogerson, who joined Costain from Serco earlier this year as chief development officer.
Charles Sweeney, previously managing director of energy & process, has quit after nine years with Costain.
Alan Kay, previously managing director of the environment division, takes on the new role of group technical & operations director. Having just completed Harvard Business School’s advanced management programme, his job will be “to drive innovation, operational and engineering excellence across the group”.
The infrastructure division will now also include all power sector activities and will continue to be headed by managing director Darren James.
Group chief executive Andrew Wyllie said: "As part of the planned transformation of Costain we have formed this new natural resources division committed to delivering an innovative and integrated service across engineering consultancy, construction and operations and maintenance.
"I would like to thank Charles for his service to the company and I look forward to working with Mark and Alan in their new roles."