Under the new executive presidential system, the Cabinet will be reduced from 26 to 16 while the Prime Minister's office will be abolished.
Erdogan named his son-in-law Berat Albayrak as treasury and finance minister. "There is no stopping for us until we bring Turkey - which we saved from plotters, coupists and political and economic hitmen, street gangs and terrorist organisations - to among the top 10 economies in the world", he said.
The lira, which has lost almost a fifth of its value against the dollar this year, dropped almost 3 percent to 4.74 to the dollar minutes after the cabinet announcement.
Army chief of staff General Hulusi Akar joined the government as defense minister but Mevlut Cavusoglu kept the post of foreign minister.
Mr Erdogan has largely ruled by fiat since 2016, when he imposed a state of emergency on the country in response to a failed coup attempt against him.
After taking the oath, Erdogan plans to visit the mausoleum of Mustafa Kemal Ataturk, the founder of the modern, secular, Turkish Republic.
"As president, I swear upon my honor and integrity, before the great Turkish nation and history, to work with all my power to protect and exalt the glory and honor of the Republic of Turkey", Erdogan said in his speech to Parliament after being sworn in.
"We are embarking on this road by using this opportunity as best we can for a strong parliament, strong government and strong Turkey", he said.
His supporters see them as just reward for a leader who has put Islamist values at the core of public life, championed the pious working classes and built airports, hospitals and schools.
Erdogan has been in power for 15 years, first as prime minister, and then as president, from 2014. "In other words, Turkey will be an institutionalized autocracy".
No major Western leader featured on a list of 50 presidents, prime ministers and other high-ranking guests.
In the aftermath of the 2016 coup, Turkey, a member of the North Atlantic Treaty Organisation military alliance and still nominally a candidate to join the European Union, has detained some 160,000 people, jailed journalists and shut down dozens of media outlets.
Investors are also keen for details on Erdogan's new economic team, which is expected to be announced later on Monday.
Prominent market-friendly ministers, who encouraged investor confidence, are not included in Erdogan's new government.
Scrapping the term would remove a shield that helps ensure the bank's independence from politicians, former central banker Ugur Gurses said.
Erdogan faces economic problems such as high interest rates and inflation as well as a plunging currency that has lost 17 percent of its value against the dollar since the start of 2018.
"For the cabinet appointments in the past several years, the most important issue has been the presence of the current deputy prime minister, Mehmet Simsek", said Inan Demir, a senior economist at Nomura International. Erdogan won an absolute majority in the presidential election with 52.5% of the vote, according to Turkey's Supreme Election Council (YSK).
Death toll in Pakistan rally attack climbs to 21
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Jose Mourinho praises 'mature' Paul Pogba after France win
The experienced Croatian team is led by arguably the player of the tournament so far, Luka Modric. "We don't want to stop". One thing to keep an eye on in this match is the legs and how exhausted the players will be, especially with Croatia.
Britain's Prince Louis christened without Queen
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Belgium is the most exhaustive team in all aspects: Lloris
Let us know your thoughts - and if you threw the remote at the TV during Alli's celebrations - by posting a comment below. When I played against him (in the Champions League in February 2017) he had played only 10 matches and I didn't know him.
The Galaxy Note 9 is set to be another disappointment
The first official Galaxy Tab S4 press render has been leaked online and it reiterates what we know about the tablet so far . South Korean tech giant Samsung is now working on its 10th generation Galaxy S smartphones - S10 and S10 Plus.
Meghan dazzles in Roland Mouret on day two of her Dublin visit
The programme will include official meetings with The President of Ireland, Michael Higgins, and with The Taoiseach, Leo Varadkar. Highlights of the short two-day trip include a Gaelic sports festival at Croke Park, the home of the Gaelic Athletic Association.
Abe to visit flood-hit western Japan as deaths reach 176
Another nine are missing. "He always used to come to our house to play games and things", a teenaged neighbor told NHK. Three weeks later, she is one of at least 158 people who died after the historic deluge in western Japan last week.
Lebanese woman sentenced to eight years for 'insulting' Egypt
The 24-year-old was charged with "deliberately broadcasting false rumours which aim to undermine society and attack religions". Initially she was sentenced to 11 years in prison, but that was amended within hours to eight years, a judicial source said.