President Mohamed Mursi ordered a surprise reshuffle on Sunday including retiring Field Marshal Hussein Tantawi and appointing a vice-president.
The Islamist president appointed Abdel Fattah al-Sisi as new defense minister and Sidki Sobhi as chief of staff, his spokesman said.
He also decided to assume legislative power, reversing constitutional decrees issued by the military council in June.
Mursi also granted himself the right to form a new constituent assembly to rewrite the constitution if the current one was to face obstacles disallowing it from proceeding.
Parliamentary elections will take place within two months of a referendum on the constitution, Mursi also decided on Sunday.
He appointed judge Mahmoud Mekki as vice-president.
Aswat Masriya (Cairo)
