Former Stroud College student Sajid Javid has been promoted to take over from Maria Miller as the new Culture, Media and Sport Secretary.
The Bromsgrove MP, a former managing director at Deutsche Bank, has long been tipped as a rising star in the Conservative Party and has served as Financial Secretary to the Treasury since last October.
Nicky Morgan is stepping up from her role as Economic Secretary to the Treasury to replace Mr Javid, the Prime Minister said.
Mr Javid, a father of four, is part of the 2010 intake of MPs and was quickly made a member of the Work and Pensions Select Committee.
Stroud's sitting Tory MP Neil Carmichael welcomed the appointment:
— Neil Carmichael MP (@neil_mp) April 9, 2014
At the age of 25 he became a vice-president at Chase Manhattan Bank and his background in finance made him an obvious choice for a job under Chancellor George Osborne. In 2012 the state-educated MP was made economic secretary to the Treasury, rising up the departmental ranks the following year.
Last month he sparked jeers on the Labour benches in the House of Commons when he said all appointments to a powerful Bank of England committee are made ''on merit'' after being asked why no women had been appointed since June 2010.
Ms Morgan, who has one son, served in the whips' office until being appointed economic secretary to the Treasury last year.
The Loughborough MP also came into Parliament at the last general election after a career in corporate law.
Ms Morgan's profile began to rise after last month's Budget when she was put forward to tour the TV studios to explain the measures that had been announced.
The Prime Minister said she will attend Cabinet in her additional role as Minister for Women.
Gloria De Piero, shadow minister for women and equalities, said: "David Cameron's decision to replace Maria Miller with Sajid Javid means that there is now no full member of the Cabinet speaking for women.
"There are now just three women running Government departments out of a possible 22, demonstrating that when it comes to women, it's out of sight, out of mind for this out-of-touch Government."
The decision to give Ms Morgan ministerial responsibility for women was criticised in light of her opposition last year to the legalisation of gay marriage.
PinkNews publisher Benjamin Cohen said: "It is unfortunate that the new Minister for Women opposes the rights of some women, lesbians, to have the right to marry.
"I hope that in her new role, Nicky Morgan will represent all women regardless of the gender of the person they love."
Mr Javid has taken on responsibility in government for equalities.