US President-elect Barack Obama has nominated his former rival, Hillary Clinton, as his secretary of state.
Mr Obama described the former first lady as a woman of "tremendous stature" who had his "complete confidence".
Mrs Clinton lost out to Mr Obama when they contested a bitterly fought race for the Democratic Party's nomination.
Mr Obama also announced his nominations for other key national security posts. He said the current Defence Secretary, Robert Gates, would remain in his job.
Retired General James L Jones was named national security adviser, while former justice department official Eric Holder was nominated for the post of attorney-general, and Arizona Governor Janet Napolitano as secretary of homeland security.
Mr Obama's long-time adviser, Susan Rice, will serve as the US permanent representative to the United Nations in New York.
His foreign policy team under Hillary Clinton will reassure the more hawkish elements in the US, but might disappoint those who wanted a more radical shift, says BBC News website world affairs correspondent Paul Reynolds.
Mr Obama said Mrs Clinton "knows many of the world's leaders" and "will command respect in every capital".
He added: "Hillary's appointment is a sign to friend and foe of the seriousness of my commitment to renew American diplomacy and restore our alliances."
Although the two repeatedly clashed during the nomination race, Mrs Clinton went on to campaign for Mr Obama as he took on Republican Senator John McCain in the race for the White House.
Former President Bill Clinton had cleared the way for his wife's appointment by reaching a complicated agreement on his financial arrangements, reports said.
The American people have demanded not just a new direction at home, but a new effort to renew America's standing in the world as a force for positive change
Correspondents said there had been fears her nomination could falter over the appearance of conflicts of interest between her husband's charitable foundation and lucrative speechmaking schedule.
Mr Clinton has agreed to release the list of donors to his foundation by the end of the year, officials overseeing the presidential transition said.
He has also agreed to submit future engagements, speeches and sources of income to the State Department and the White House and to take a more behind-the-scenes role in the daily running of his foundation, sources said.
'Energy and intellect'
Mrs Clinton pledged to give the job "her all".
"The American people have demanded not just a new direction at home, but a new effort to renew America's standing in the world as a force for positive change," she said.
We will also ensure that we have the strategy - and resources - to succeed against al-Qaeda and the Taleban
The current secretary of state, Condoleezza Rice, praised Mrs Clinton as an "inspiration" who would "bring enormous energy and intellect" to the role.
"And most important I know her to be somebody who has what you need most in this job: which is a deep love of the United States of America."
Announcing his team, Mr Obama said: "The national security challenges we face are just as great and just as urgent as our economic crisis."
Announcing that Mr Gates would remain in his job, Mr Obama said he would be given "a new mission" to "responsibly" end the war in Iraq.
Mr Gates said he was 'deeply honoured' to be asked to continue
"We will also ensure that we have the strategy - and resources - to succeed against al Qaeda and the Taleban," he added.
Selecting Mr Gates - who was appointed by President George W Bush two years ago - allows Mr Obama to honour a promise to name at least one Republican cabinet member.
Mr Gates said he was "deeply honoured" to be asked to continue and that he did so with "a profound sense of personal responsibility, to and for our men and women in uniform and their families".
Gen Jones, the nominee for national security adviser, is a former top commander of Nato and US forces in Europe. He served in the Bush administration as a Middle East adviser.
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