Jane Hutt has been removed as the Welsh Assembly Government's health minister.
Ms Hutt, 56, has come under strong criticism from Labour MPs as well as the opposition, particularly over long waiting lists.
The Vale of Glamorgan AM, the only person in the post since the assembly was formed in 1999, becomes business manager. She is replaced by her former deputy Dr Brian Gibbons, a GP.
First Minister Rhodri Morgan denied she was sacked, but said she was moved.
Previous business manager Karen Sinclair loses her place in the cabinet - but she keeps her other role as chief whip, which means she will be able to sit in on cabinet meetings as an observer.
She said she was "very privileged and proud" to have been asked to be the Business Minister in 2003.
Mr Morgan said he was confident Dr Gibbons had a unique combination of experience and talent "to build on the platform created by Jane Hutt for the health and social services of Wales since May 1999".
"I have asked Jane to take on another key cabinet position where she can help to lead the Welsh Assembly Government's agenda and ensure that it is translated into practical action."
Mr Morgan said he had decided to separate the roles of business manager and chief whip, and was grateful for the work Ms Sinclair had done as business manager.
Dr Gibbons, 55, was brought up in County Roscommon in the west of Ireland. His father Hugh was a member of the Irish Dail, or Parliament.
Dr Gibbons became a GP in Blaengwynfi, in the Upper Afan Valley, in 1980.
Dr Gibbons, who is married with two children, was elected Aberavon AM in May 1999 and appointed Ms Hutt's deputy in October 2000.
Dr Brian Gibbons comes from an Irish political family
In 2003, he was appointed deputy minister for economic development and transport.
Ms Hutt's removal was welcomed by the Conservatives, who said she had been a "disaster for the health service".
Plaid's assembly leader Ieuan Wyn Jones said "any change in personnel must be accompanied by a willingness to move away from a failing policy".
Mike German, assembly leader of the Lib Dems, said the move was "only window dressing" unless Dr Gibbons was prepared to take "the necessary action to improve the Welsh NHS",
Dr Tony Calland, chairman of the BMA Welsh council, said Ms Hutt had "worked very hard to improve NHS Wales" and her strategy had been successful in some areas of Wales but not in others.