Egyptian President Mohammed Morsi Sunday ordered the powerful head of the army and defence minister, Field Marshal Hussein Tantawi, into retirement and cancelled a constitution issued by the military that restricted presidential powers, dpa reported.
Tantawi was the head of the Supreme Council of the Armed Forces (SCAF), which ruled the country after president Hosny Mubarak was toppled in February 2011 until Morsi took office on June 30.
Tantawi kept the defence portfolio in a new government formed earlier this month.
Morsi, from the Muslim Brotherhood, and his Islamist allies did not hide their displeasure at a temporary constitution issued by the military in mid-June curtailing the president's role and granting the army sweeping powers.
Tantawi, a veteran defence minister under Mubarak, was replaced with Abdul-Fatah al-Sessi, according to state television. Morsi also ordered the retirement of the chief of army staff, Sami Anan, and replaced him with Major General Sedki Sobhi, it reported.
Morsi said his decisions were aimed at allowing the army to "be devoted to its mission of protecting the country."
"My decisions did not target people or seek to embarass institutions ... but were taken in the best interest of this country and its people," Morsi said at a televised ceremony in Cairo.
Morsi appointed both Tantawi and Anan as presidential advisors and granted them prestigious medals, said a presidential spokesman.
Hundreds of Egyptians flocked to Tahrir Square in central Cairo and outside the presidential palace in eastern Cairo, showing support for Morsi's surprise decisions.
"The president has exercised his powers and temporarily took legislative powers from the military council until a new parliament is elected," Mohammed Fuad, a legal advisor to Morsi, told the online edition of the state-run newspaper Al Ahram.
The military retook legislative control in June after the country's top court dissolved the lower house of parliament where Islamists had a clear majority.
State television quoted an unnamed military source, who denied reports that Morsi's decisions had drawn "negative responses" inside the army.
The latest moves are seen as escalating the power struggle between Morsi and the military.
Earlier this week, Morsi sacked the head of the intelligence service and the commander of the Presidential Guard.
The shake-up of the top army commanders comes as the Egyptian Army is carrying out a massive offensive in the Sinai Peninsula against Islamist militants suspected of killing 16 soldiers at the border town of Rafah, near Gaza, a week ago.
Morsi on Sunday also appointed Mahmoud Mekki, a former judge, as vice president. Mekki will be part of a diverse presidential team, which Morsi promised to establish during his campaign for presidency.
Morsi is Egypt's first elected civilian and Islamist president. All the country's four previous presidents came from the army.