It also emerged that Mehmet Simsek, a former banker at Merrill Lynch who acted as deputy prime minister in Turkey's previous government, will not hold a position in the new cabinet.
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.
The lira has been battered by concern about Erdogan´s drive for lower interest rates and by comments in May that he planned to take greater control of the economy after the June elections.
Erdogan, who has transformed Turkey by allowing Islam to play a greater role in public life and boosting the country's global stature, will take his oath nearly two years after defeating a bloody attempted coup.
Erdogan, who has transformed Turkey in 15 years of rule by allowing Islam a greater role in public life and boosting its global stature, took his oath in parliament for a five-year term after his June election victory.More news: Three Lions Is Official Vodafone Big Top 40 Number 1
Recep Tayyip Erdogan said Turkey was "entering a new era" as he was sworn in as the country's first executive president on Monday, giving him sweeping new powers which critics warn will lead to authoritarianism.
"Turkey is leaving behind a system which cost the country politically, socially, economically", Erdogan told the crowd, comprised also of dozens of foreign leaders and dignitaries. For some, it is the coronation of a new Turkey.
Erdogan has been the president of Turkey since 2014.
Erdogan´s supporters see the changes as just reward for a leader who has put Islamic values at the core of public life, championed the pious working classes and overseen years of strong economic growth.
But Erdogan faces immediate challenges posed by Ankara's faltering bid to join the European Union and tensions between the United States and its North Atlantic Treaty Organisation ally.More news: Movie producer Weinstein pleads not guilty to new sex assault charge
Fuat Oktay, a former head of Turkey's emergencies agency, has been named as the sole vice president, a newly-created post.
Russian Prime Minister Dmitry Medvedev will attend, in a new sign of the warm ties between Ankara and Moscow, as will Venezuelan President Nicolas Maduro, regarded with disdain by Washington but an ally of Erdogan.
Erdogan is expected to announce his Cabinet on Monday evening. In 2016, a coup to depose him failed.
Erdogan will face immediate challenges posed by an imbalanced if fast-growing economy and foreign policy tensions between the West and Turkey, a North Atlantic Treaty Organisation member.
Last month Mr Erdogan was re-elected with 53% of the vote.More news: How to get tickets to Global Citizen Festival
The markets will keep a close eye on economic appointments, keen to see a steady hand at the helm in a fast-growing economy dogged by double-digit inflation and a widening current account deficit. The lira, which gained more than 1 percent earlier on Monday to 4.51 against the dollar, briefly fell back sharply after a government decree removed a clause stipulating a five-year term for the central bank governor.
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