Binali Yildirim, 60, formerly minister of transport and communications, replaces Ahmet Davutoglu, who stepped down on Sunday amid a range of differences with the president, including Davutoglu's apparently less-than-enthusiastic stance toward an overhaul of the constitution to give the largely ceremonial presidency executive powers.
"We will immediately start work to achieve a new constitution, including a presidential system," Yildirim told lawmakers of his Justice and Development Party, or AKP, in his first speech after taking office.
Many fear the presidential system that Erdogan seeks will concentrate too many powers in the hands of the Turkish strongman, who has adopted an increasing authoritarian style of governing, has cracked down on media and government critics and is accused of meddling in the running of the government in breach of the constitution.
The new government - which Yildirim is widely believed to have formed in consultation with Erdogan - includes nine new names, although most ministers from Davutoglu's previous Cabinet retained key portfolios.
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Volkan Bozkir, the minister in charge of relations with the European Union, was replaced by Omer Celik, a founding member of the AKP who is known to be close to the president. Erdogan's son-in-law, Berat Albayrak, kept his position as energy minister.
In a clear sign that Erdogan would continue to influence government, he was scheduled to chair the new Cabinet's first meeting at his palace tomorrow.
Domestically, the political reshuffling takes place as Turkey faces serious security threats including increased attacks by Kurdish and Islamic State militants.