Saudi Arabia's King Salman on Wednesday named his powerful Interior Minister as heir to the throne and a son as second in line, under a shakeup that also saw the world's longest-serving foreign minister replaced.

A royal decree removed Crown Prince Moqren bin Abdul Aziz bin Saud and replaced him with Prince Mohammed bin Nayef, who headed a crackdown on Al-Qaeda a decade ago.

"We have decided to respond to his highness and what he had expressed about his desire to be relieved from the position of crown prince," said a statement from the royal court, carried by the official Saudi Press Agency.

It added that Moqren was also relieved of his position as deputy prime minister in the world's largest oil exporter.

The decree named "Prince Mohammed bin Nayef as crown prince" as well as deputy prime minister and said he will continue to hold his position of interior minister and head of the political and security council, a coordinating body.

The dismissal of Moqren removes the last-remaining high-level official remaining from the era of King Abdullah, who died on January 23 and was replaced by Salman,79.

Moqren, 69, would have been the last son of the kingdom's founder, Abdul Aziz bin Saud, to rule.

His dismissal leaves bin Nayef as the first of the second generation, or grandsons of Abdul Aziz, in line to lead the conservative Islamic kingdom.

The appointment of bin Nayef further solidifies control of Salman's Sudayri branch of the royal family. Their influence had waned under Abdullah.

A separate decree said King Salman's son, Prince Mohammed bin Salman, who is in his early 30s, will "be deputy crown prince".

He retains his position as minister of defence and head of the economic and development council, a coordinating body.

In another major change, Saudi Arabia's envoy to the United States, Adel al-Jubeir, was appointed foreign minister, a royal decree said.

He replaces Prince Saud al-Faisal who "asked to be relieved from his duties due to his health condition," said the decree carried by the Saudi Press Agency.

Prince Saud had held the post since 1975, making him the world's longest-serving foreign minister.

Born in 1940, Prince Saud was in the United States for back surgery when Salman acceded to the throne.

The decree said Prince Saud has been appointed as an adviser and a special envoy of the king, as well as a supervisor on foreign affairs.

Under King Salman, Saudi Arabia has adopted a more assertive foreign policy, leading an Arab-dominated coalition targeting Iran-backed rebels in neighbouring Yemen since late March.

Jubeir came to attention answering reporters' questions in the United States, in defence of his country's decision.

Tensions between Sunni-dominated Saudi Arabia and Shiafff Iran have soared over Yemen.

Salman also named a new health minister in Wednesday's shuffle, the second major government shakeup since he took office.

The dismissed crown prince, Moqren, had really only a "protocol" position under King Salman, a Western diplomatic source has said.

He described bin Salman, the king's son, as "the strong man in Saudi Arabia."