Jeremy Hunt has been promoted to Health Secretary as the line-up of David Cameron's reshuffled Cabinet begins to take shape.
The senior Tory, who came under huge pressure as Culture Secretary earlier this year over his role in the BSkyB takeover bid, replaces Andrew Lansley who becomes Commons leader.
It is the most significant element to be revealed so far of a wide-ranging shake-up of the top team that also saw Ken Clarke replaced as Justice Secretary by employment minister Chris Grayling.
The veteran former chancellor has accepted a roving "wise head" role within the Cabinet.
There was also a promotion for Theresa Villiers, who replaces Owen Paterson as Northern Ireland Secretary - but several female colleagues were ousted from their roles.
Conservative co-chairman Baroness Warsi, Welsh Secretary Cheryl Gillan and Environment Secretary Caroline Spelman have all departed.
There is also a return to the front benches for former Liberal Democrat Treasury minister David Laws, who will replace Sarah Teather as education minister.
While the changes are extensive, the most senior Cabinet positions are unchanged, with the Prime Minister confirming he would keep Iain Duncan Smith and Michael Gove in place. All of the Liberal Democrats' Cabinet ministers will also keep their jobs.
A Downing Street source said the Work and Pensions Secretary and the Education Secretary were considered "key reformers" by the Prime Minister. "He wants them to stay in place to get the job done."
Mr Clarke denied that being moved to minister without portfolio was a humiliation. The 72-year-old Tory "big beast" told reporters: "Being offered a job in the Cabinet at my age? Don't be so daft. It's rather a privilege, I think."