Erdogan won an absolute majority in the presidential election with 52.5% of the vote, according toTurkey's Supreme Election Council (YSK).
Abolishing the post of prime minister, the president will now form the government, appoint ministers, vice presidents and high-level bureaucrats, issue decrees, prepare the budget and has the power to impose a state of emergency.
Hardline Interior Minister Suleyman Soylu keeps his job, while Akar's appointment as defense minister was also a surprise and it remains unclear who will replace him as army chief of staff.
Ankara has been disappointed with North Atlantic Treaty Organisation allies for not supporting Turkey's fight against terrorism and the lack of cooperation in meeting Turkey's defense needs.In addition, the Turkish president is expected to meet with European Council President Donald Tusk, European Commission President Jean-Claude Juncker and European Parliament President Antonio Tajani.Several members of Turkey's new Cabinet will reportedly accompany Erdoğan on his visit.
Erdogan said the executive presidency would put behind a "system that heavily cost our country through political, social and economic chaos".
For 95 years, Turkey was a parliamentary republic, its Grand National Assembly the heart of power. He vowed to "remain loyal to the rule of law, to the democratic and secular republic, and to Ataturk's principles and reforms".
In his inaugural speech, President Erdogan said no country needs a saviour and the only thing that humanity needs is justice and equality.
Those attending included Ankara's top allies from Africa, the Middle East and the former Soviet Union but relatively few European figures.
Mr Erdogan is the arch polariser and views today are again divided.
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Empowered by a popular mandate on the back of a convincing electoral victory, Erdoğan will have to address urgent questions in Turkey such as the fate of more than 3 million Syrian refugees living in the country, the progress of the war across the border, a faltering economy and a weakening currency.
The lira, which has lost almost a fifth of its value against the dollar this year, dropped almost 3 per cent to 4.74 to the US currency after the cabinet announcement.
During the election he was reported to have complained that the sharp drop in the lira this year had been prompted by a "very open and clear operation" against Turkey.
Albayrak's surprise switch from the energy ministry spooked financial markets, who were also unhappy to see there was no room for outgoing deputy prime minister Mehmet Simsek, the government's pointman on the economy.
Berat Albayrak, the husband of Erdogan's elder daughter Esra, was on Monday named by the president as treasury and finance minister as part of a cabinet reshuffle for his new term.
Meanwhile Mevlut Cavusoglu remains in his post as foreign minister.
Simsek, a former Merill Lynch economist who had spent much of the past year trying to reassure markets after sometimes provocative comments by Erdogan, appeared to show no bitterness over his departure.
But he has also polarised opinion, cracking down on opponents and putting some 160,000 people in jail.
High-level talks between the two countries starting in May had failed to deliver a breakthrough to head off a trade war. China then fired back with retaliatory tariffs on $ 34 billion worth of US goods, including soybeans and pork.
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Anderson scented blood and, out-duelling Federer time and again, he broke in the seventh game to level the match at two sets all. Federer, the No. 1 seed, had match point up 5-4 in the third set, but could not put Anderson, the No. 8 seed, away.
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