"Egypt has followed with the utmost interest the formation of the presidential leadership council in the Yemeni republic, with full presidential powers, to complete the tasks of the transitional phase in Yemen, according to the constitution and the Gulf initiative," a statement by the Egyptian Ministry of Foreign Affairs read on Thursday.

“Egypt sees this step as an important development and hope it helps brotherly Yemen to achieve safety and stability by reaching a Yemeni-Yemeni consensus to complete the transitional phase and end the conflict,” the statement added.

Earlier on Thursday, President Abedrabbo Mansour Hadi said he is handing his powers to a new leadership council, in a major shake-up in the coalition battling Houthi rebels as a fragile ceasefire takes hold.

President Hadi made the announcement in a televised statement on the final day of Yemen talks held in the Saudi capital Riyadh.

"I irreversibly delegate to this presidential leadership council my full powers," he said.

Saudi Arabia said it welcomed Hadi's announcement and pledged $3 billion in aid and support for its war-torn neighbour, some of it to be paid by the United Arab Emirates, according to AFP.

Hadi's internationally recognised government has been locked in conflict with the Iran-backed Houthis, who control the capital Sanaa and most of the north despite a Saudi-led military intervention launched in 2015.

Hadi has been based in Saudi Arabia since fleeing to the kingdom that year as rebel forces closed in on his last redoubt, the southern port city of Aden.

A United Nations-brokered truce that took effect last Saturday -- the first day of the Muslim holy month of Ramadan -- has offered a glimmer of hope in the conflict which has triggered what the UN calls the world's worst humanitarian crisis.

The truce came as discussions on Yemen were unfolding in Riyadh without the participation of the Houthis, who refused to attend talks on "enemy" territory.

Egypt has welcomed the truce, saying it hopes the truce could contribute to backing political solutions, initiatives, and efforts to reach a comprehensive settlement for the Yemeni conflict.

Since the start of the conflict in Yemen in 2015, Egypt has pushed for a political solution in Yemen that would meet the aspirations of the Yemeni people in achieving stability and development and end the extended humanitarian crisis.

Egypt steadfastly condemned all Houthi terror attacks on Saudi Arabia and the UAE in recent years.

Cairo has also supported the UN’s efforts in Yemen, calling for a solution to the crisis that is based on the Gulf Cooperation Council (GCC) Initiative, the outcome of the national dialogue, and the UN Security Council’s relevant resolutions.

The talks concluded Thursday with Yemeni Prime Minister Maeen Abdulmalik Saeed calling on the new leadership council "to start negotiations with the Houthis under the supervision of the United Nations in order to reach a final and comprehensive political solution".