File Photo: Raffaella Petrini and Pope Francis shaking hands
The pontiff appointed Franciscan sister Raffaella Petrini as the new secretary general of the governorate, making her the first woman to ever hold the post.
Petrini, 52, who will be responsible for overseeing administrative operations, including the Vatican museums, post office and police, becomes the highest-ranking woman in the world's smallest state.
The National Catholic Reporter online newspaper said the role is traditionally held by a bishop.
Francis, 84, has repeatedly said he wants women to play a greater role in the Roman Catholic Church.
In January he changed the law to allow them to serve as readers at liturgies, altar servers and distributors of communion -- but stopped short of saying the change could one day open the door to female priests.
In February he broke with Catholic tradition to appoint a woman as an undersecretary of the synod of bishops, the first to hold the post with voting rights in a body that studies major questions of doctrine.
The pope created a commission in 2016 into the history of female deacons in the early year of the Catholic Church, in a move reformers hope could open the door to women taking up the role today.
After their findings were said by the pope to be inconclusive, he set up a fresh commission to look into the issue last year.