Turkey's Tayyip Erdogan has ushered in the new, executive presidential system he had long campaigned for by putting his son-in-law in charge of the economy and promising greater overhaul of a country he has dominated for 15 years.

Key points: Tayyip Erdogan becomes the most powerful leader since Mustafa Kemal Ataturk

Tayyip Erdogan becomes the most powerful leader since Mustafa Kemal Ataturk The Prime Minister post is scrapped and the President selects his own cabinet

The Prime Minister post is scrapped and the President selects his own cabinet Mr Erdogan says the powerful executive presidency is vital to driving economic growth

Hours after he was sworn in with sweeping new powers at a ceremony in the capital of Ankara, Mr Erdogan named Berat Albayrak as the treasury and finance minister in his new cabinet.

The announcement — and the absence of familiar, market-friendly ministers from the cabinet — helped to send the lira sharply lower.

Berat Albayrak is named as the treasury and finance minister in the new cabinet. ( AP: Burhan Ozbilici )

Mr Erdogan, the most popular and divisive leader in recent Turkish history, has now formally become the most powerful leader since Mustafa Kemal Ataturk founded the republic from the ruins of the Ottoman Empire.

Just as Ataturk transformed an impoverished nation at the eastern edge of Europe into a secular, Western-facing republic, Mr Erdogan has fought to bring Islamic values back into public life and lift millions of pious Turks — long ostracised by the secular elite — out of poverty.

"We are leaving behind the system that has in the past cost our country a heavy price in political and economic chaos," Mr Erdogan said in an address.

Under the new system, the post of Prime Minister has been scrapped and the President selects his own cabinet, regulates ministries and can remove civil servants — all without parliamentary approval.

Mr Erdogan has said the powerful executive presidency is vital to driving economic growth and to ensure security after a failed 2016 military coup.

But Western allies and rights group decry what they say is increasing authoritarianism and a push toward one-man rule.

Supporters of Turkey's President celebrate outside the party headquarters in Istanbul. ( AP: Emrah Gurel )

In the aftermath of the coup, Turkey, a member of the NATO military alliance and still nominally a candidate to join the European Union, has detained some 160,000 people, jailed journalists and shut down dozens of media outlets.

The Government said its measures were necessary given the security situation.

Investors have been worried by what they fear is Mr Erdogan's tightening grip on monetary policy.

A self-described "enemy of interest rates", he has said he would look to take greater control of policy under the new system.

In one of three presidential decree issued in the Official Gazette on Tuesday, it was announced the President will appoint the central bank governor, deputies and monetary policy committee members for a four-year period.

It was also announced in the Official Gazette that Mr Erdogan had appointed ground forces commander General Yasar Guler as the new chief of the general staff, replacing General Hulusi Akar, who was appointed defence minister in the new Government.

Reuters