The Board of Estimates on Wednesday awarded a $90,000 contract to Olszewski, a Democrat who represented Dundalk until he lost a race for state Senate during 2014's Republican wave.
"I don't think they could have picked a better person," said City Council President Bernard C. "Jack" Young, who chairs the five-member board that approved the contract without discussion.
"I've worked with him on many issues. He was an able legislator. He knows the process," Young said. "I think he got caught up in a little Republican wave that took out a good person. I think this is a good move by the transportation department and I support it."
A two-term state delegate, Olszewski, 32, is a former Baltimore County high school history teacher.
Asked about the job, Olszewski said he plans to work on pushing the state to approve the planned Red Line and secure more highway user dollars for the city. The Red Line is a nearly $3 billion light rail project that would connect Woodlawn in Baltimore County to East Baltimore.
He said he expects "be doing a range of things for the department... I've been a big proponent of working across party lines. Hopefully, those relationships give me a chance to present the merits of whatever the issue is."
Olszewski said he believes he will also be lobbying the City Council and federal government on transportation issues.
Deadra W. Daly, ethics adviser for the state's Department of Legislative Services, wrote in an email that in accepting the city position, Olszewski would not be violating a state law that prohibits former state lawmakers lobbying the General Assembly for one session after they leave office. Lobbying for local governments is permitted under the law, she said.
"The Public Ethics Law does not prohibit you from representing the City in matters that are subject of State legislative action during the current legislative session," Daly said in an email to Olszewski.
Kevin Harris, a spokesman for Mayor Stephanie Rawlings-Blake, said the new position comes from a reorganization of staff and does not increase the total number of lobbyists in city government.
Adrienne Barnes, a spokeswoman for the transportation department, said the former delegate would be doing more than just lobbying.
"Johnny O will also participate in other aspects of DOT business as part of our core team," she said.
Baltimore Sun reporter Yvonne Wenger contributed to this report.