Pope Francis on Monday created a new finance ministry to oversee the Holy See's economic affairs in a move the Vatican said was aimed at helping the poor and increasing transparency, following a wave of scandals.
The ministry will be headed up by Australian Cardinal George Pell, and will prepare an annual budget for the Vatican as well as imposing international financial standards, the Vatican said in a statement.
"The Holy Father today announced a new coordination structure for economic and administrative affairs of the Holy See and the Vatican State," it said.
The Vatican added that the move was in line with a series of recommendations made by a group of cardinals advising the pope, including for a "more formal commitment" to enforcing transparency.
The move "will ensure better use of resources, improving the support available for various programs, particularly our works with the poor," it said, echoing the pope's famous call for a "poor Church for the poor".
The new ministry, formally called a "Secretariat for the Economy", will be run by a 15-member council of eight clergymen from different parts of the world and seven lay financial experts.
In his "motu proprio", or decree, Francis also said that the Vatican's Administration for the Patrimony of the Holy See, or APSA under its Italian acronym, would become the "Vatican central bank... with all the obligations and responsibilities of analogous institutions around the world".
APSA is the agency that handles the Vatican's extensive property portfolio.
The announcement was being seen as an important first step in the pope's vaunted ambition to overhaul the much-criticised Roman Curia, the central administration of the Catholic Church.
Francis has said he wants a style of government for the Church that is more "collegial" and less "Vatican-centric" and the process of consultation he used to reach his decision on the new ministry is seen as an example of this.
He has also reached outside the Church for advice, with the Vatican hiring international consultancy firms such as Ernst&Young, KPMG, Promontory and PricewaterhouseCoopers (PWC).
In a series of leaks to the media in 2012, letters surfaced from Carlo Maria Vigano, the head of the Vatican governorate, who denounced "numerous situations of corruption and misconduct".
Vigano pointed to inflated costs for Vatican works contracts as an example.
A former top APSA accountant, Monsignor Nunzio Scarano, is also currently on trial for attempting to repatriate from Switzerland 20 million euros ($27 million) that were untaxed, on behalf of some wealthy acquaintances in Naples.
The police have seized Scarano's luxury 17-room apartment in the city of Salerno and blocked nearly nine million euros on accounts linked to the cleric.
The announcement does not directly concern the Vatican bank, or Institute of Religious Works as it is officially known, which another pope-appointed commission is planning to reform.
The pope last month replaced all but one of the appointees made by his predecessor Benedict XVI to an oversight commission for the bank, which is under an Italian money laundering probe.
The bank is also screening its customers and probing "unusual transactions" in a process set to be completed this year.