He secured an outright victory in the June 24 presidential polls, winning nearly 52.3 percent of the votes.
The post of prime minister has been scrapped and the president will now be able to select his own cabinet, regulate ministries and remove civil servants, all without parliamentary approval.
Erdogan will this week immediately turn to foreign policy, visiting northern Cyprus and Azerbaijan, followed by more challenging encounters at a North Atlantic Treaty Organisation summit in Brussels where he will meet US President Donald Trump and other leaders.
Since a failed coup attempt two years ago he's fired 125,000 workers, the latest 18,000 at the weekend, and jailed 160,000 people including opponents.
Turkish President Tayyip Erdogan, accompanied by his wife Emine Erdogan, greets his supporters as he drives to the parliament to take the oath of office for a new presidential term.
There are 16 ministers in Erdogan's streamlined new cabinet, which Erdogan has said will be more efficient and act faster. His re-election marked Turkey's transition to an executive presidential system of government.
The lira erased earlier gains after the decree was published and was trading 0.2 per cent lower at 4.58 per dollar at 5:24 p.m.in Istanbul.
Erdogan can also assign one or several vice presidents, with reports indicating he may choose at least three.
Erdogan, who has transformed Turkey in 15 years of rule by allowing Islam a greater role in public life and boosting its global stature, took his oath in parliament for a five-year term after his June election victory.
"One of the most important democratic transformations of our country in its history has been successfully completed today", Erdogan said.
Turkish President Recep Tayyip Erdogan, accompanied by his wife, Emine Erdogan, arrives for a ceremony at the Presidential Palace in Ankara, Turkey, on July 9. Erdoğan will also have the power to appoint senior members of the judiciary and to issue decrees with the force of law. "Turkey is leaving behind a system which cost the country politically, socially and economically".
Fuat Oktay, a former head of Turkey's emergencies agency, has been named as the sole vice president, a newly-created post. There was no place in the cabinet for former deputy prime minister Mehmet Simsek, who was seen as the main market friendly minister in the previous government.
In the aftermath of the 2016 coup, Turkey, a member of the North Atlantic Treaty Organisation 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.
Erdogan said on Saturday that he would tackle "the structural economic problems" of high interest rates and inflation and a wide current account deficit.
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