Israeli Defence Minister Shaul Mofaz has left Likud to join Prime Minister Ariel Sharon's new Kadima party.
Mr Mofaz is seen as a close ally of Mr Sharon
His exit will further damage the rightist Likud party, hit by infighting and losing support since Mr Sharon left last month, correspondents say.
The prime minister set up the centrist Kadima party in order to give himself more room for manoeuvre in seeking a peace deal with the Palestinians.
Likud hardliners had opposed Mr Sharon's withdrawal from Gaza.
The BBC's Matt Prodger in Jerusalem says Mr Mofaz, who has been defence minister for three years, is popular among many Israelis for his tough stance against the Palestinian uprising.
He is also seen as one of Mr Sharon's top allies, overseeing the withdrawal of troops and settlers from the Gaza Strip earlier this year.
Mr Sharon (R) hopes to emerge dominant from the March elections
The defence minister said he was leaving Likud because of what he called right-wing extremists within the party.
His presence in Kadima is expected to boost Mr Sharon's already good chances of emerging dominant from legislative elections in March, our correspondent says.
Israeli army radio quoted Mr Sharon as saying he was "pleased with Mofaz's decision".
Mr Mofaz joins other high-profile Likud figures like Finance Minister Ehud Olmert and Justice Minister Tzippi Livni, as well as former Labour leader Shimon Peres, in defecting to Kadima.
Israeli radio reports say he made the move after Mr Sharon promised to keep him as defence minister if re-elected in March.
However, a Kadima spokesman refused to comment on the reports.
Mr Mofaz had been campaigning to become the new leader of Likud but opinion polls suggested he was unlikely to win.
His departure leaves just former Prime Minister Binyamin Netanyahu and Foreign Minister Silvan Shalom as credible contenders.