Light wave propagation in third-order nonlinear media with applied external electric field is investigated. Interplay between the nonlinear electro-optic and all-optical effects is examined theoretically. Energy exchange between the orthogonal light polarizations, the cross polarization conversion, results. The assisting external field acts as either the effect-enhancing or functionality-controlling parameter. Various materials such as silica glass, silicon, other bulk and quantum well semiconductors, organic materials, and particle-doped nanostructures are referred to as possible candidates for device implementations. Numerical estimates of achievable parameters in a selected suitable material are discussed.