National's workplace relations spokeswoman Amy Adams has criticised the framework.
"While there's been lots of talk about how Mr Little will be responsible for his decisions, it will be some poor senior public servant who carries the can," Adams said.
"Why would any sensible person put their hand up for that job?"
Hughes said that Gawn was a suitable choice as he was a highly respected military officer who has led international operations with the NZ Defence Force and the United Nations.
"Major General Gawn is a high performing, innovative leader with strong stakeholder management skills and will bring a clear, structured delivery focus to the work of the agency," Hughes said.
"He has extensive experience managing and mitigating risk, including while operating in hazardous environments, and he has an engaging leadership style and is a skilled communicator."
Gawn has been based in Israel for the past two years as Head of Mission for the UN Truce Supervision Organisation, overseeing peacekeeping operations for the five signatories of the 1949 Armistice Agreement.
He holds a Master of Strategic Studies from Deakin University in Australia and was Land Commander New Zealand Army from 2007 to 2010, Commander Joint Forces New Zealand from 2011 to 2013, and Chief of the New Zealand Army from 2013 to 2015.
Gawn will begin his two-year appointment when the agency is established at the end of January. He will work closely with the minister as well as the Pike River families and their experts.
The families have put forward three expert-informed reports about manned re-entry since 2012, believing that the level of risk can be adequately mitigated.
In a ministerial briefing to Little released this month, MBie officials said the reports did not fully take into account cost or risk.
But Little said he had more updated information since the briefing that lead him to believe that the prospects for re-entry had improved.