Cyprus President Demetris Christofias appointed a new cabinet on Friday, his office said, naming Kikis Kazamias as finance minister charged with leading the holiday island out of potential bankruptcy.
"Exercising his duty under the constitution, President Demetris Christofias has gone ahead and appointed a new cabinet," the statement said, adding the cabinet would be sworn in at midday (1000 GMT).
Cyprus, which was already struggling to get its finances in order, was left reeling after a July 11 munitions explosion killed 13 people and destroyed the Mediterranean island's biggest power plant.
The disaster that all but crushed any hopes of economic growth this year.
The appointment of the new cabinet came after the centre-right party Diko abandoned its coalition partnership with the communist Christofias on Wednesday, saying talks had collapsed over measures to address the country's economic and political woes.
Last week, Christofias called on his cabinet to resign after Diko urged a reshuffle.
In the new cabinet, Erato Kozakou was named the new foreign minister, and Demetris Eliades was appointed to head the defence ministry.
The ministers of the interior, labour and justice remained unchanged, respectively Neoclis Sylikiotis, Sotiroulla Charalambous and Loukas Louka
As the new finance minister it will be up to Kazamias to steer Cyprus out of its economic quagmire.
He is a member of Christofias's AKEL party and a former representative to the European Court of Auditors. He also served as communications minister in the Diko government of late president Tassos Papadopoulos, which preceded Christofias' who was elected in 2008.
But with Diko's departure, Christofias will have an even more difficult task to restore the public's trust.
His communist party is now in a clear minority in parliament, which could make it difficult for the president to push through legislation. The party has only 19 deputies in the 56-member House of Representatives.
In particular, the opposition has called for deeper cuts in state spending.
Government spokesman Stefanos Stefanou said this week Christofias was "not isolated," even though his administration started as a three-party coalition in 2008 collapsed after Diko pulled out.
The socialist EDEK party withdrew last year.
The president and his administration have been under fire over their perceived incompetence in preventing last month's explosion.
Indecision and political instability have prompted two international ratings agencies -- Standard & Poor's and Moody's -- to downgrade the government's ratings over debt fears compounded by the blast aftershock.
The Cypriot economy is largely dependent on finance and tourism.
The northern third of the island has been occupied since 1974 by Turkish troops and administered by the Turkish Republic of Northern Cyprus, which is recognised only by Ankara.
Before the explosion, the government forecast 2011 GDP growth of 1.5 percent and of 2.5 percent in 2012. Those figures have since been reduced to zero for this year and around one percent next year.
In the second half of 2012, Cyprus will assume the rotating presidency of the European Union.