The move, which Adel Fakieh announced on Twitter late yesterday, came after he inspected King Fahd Hospital's emergency department in the Red Sea city.
The facility was temporarily shut last month after several medics were infected by the Middle East Respiratory Syndrome coronavirus.
Panic at the western city's main hospital prompted at least four doctors to resign after they refused to treat MERS patients for fear of infection.
On April 21, nearly a week after the resignations, Riyadh dismissed the kingdom's health minister without saying why, and appointed Labour Minister Fakieh as acting health minister.
Also Read
"The new team will immediately take up its duties," he wrote on Twitter, adding that "the ministry will take all decisive measures to achieve its goals in preserving the health of members of the society."
Saudi Arabia, worst affected by the virus which first appeared in its eastern region before spreading across the kingdom, has so far reported 421 infections, among them 115 deaths.
Fakieh said last week that measures to contain the spread of MERS "will be announced in the coming days", as Western experts and representatives of the World Health Organisation met in Riyadh.
There are no vaccines or antiviral treatments for MERS, a disease with a mortality rate of more than 40 percent that experts are still struggling to understand.
Some research has suggested that camels are a likely source of the virus.