James Cleverly has been appointed Home Secretary following the sacking of Suella Braverman.
The MP was announced in the role after his predecessor was dismissed on Monday morning.
A No 10 source said the Prime Minister “asked Suella Braverman to leave Government and she has accepted”.
The Conservatives said Mr Sunak is carrying out a wider reshuffle which “strengthens his team in Government to deliver long-term decisions for a brighter future”.
Mr Cleverly’s appointment as Home Secretary leaves a vacancy in his former role of foreign secretary.
Ms Braverman's position had come under increasing scrutiny following an article she wrote for the Times, published on Thursday.
In the article Ms Braverman criticised what she called “pro-Palestinian mobs”, and said protest scenes were “disturbingly reminiscent” of those seen in Northern Ireland.
The home secretary also accused the Met Police of a “double standard “over their handling of protests.
Over the weekend, it emerged that Downing Street had not signed off on the article.
After being sacked, Suella Braverman said “it has been the greatest privilege of my life to serve as home secretary”, adding: “I will have more to say in due course.”
Meanwhile, former Prime Minister David Cameron has been seen entering Downing Street as a cabinet reshuffle is expected to take place today.
Mr Cameron walked inside No 10 shortly before 9am amid a ministerial reshuffle, raising speculation that he could be in line for a dramatic return to government.
News of Mrs Braverman’s exit came as defence minister James Heappey was touring broadcast studios.
Minutes before she was sacked, he had told LBC that Mr Sunak and his team in No 10 had been “very clear she (Mrs Braverman) has his confidence and, in that sense, one would imagine that she will continue”.
But he was told on air during an ITV Good Morning Britain interview that she had been sacked, leaving him to say: “Your viewers will be enjoying my discomfort, but it is in this case difficult to offer commentary when I just don’t know what is going on.”
Liberal Democrat leader Sir Ed Davey said: “Suella Braverman was never fit to be Home Secretary. Rishi Sunak knew this and he still appointed her.
“It was the Prime Minister’s sheer cowardice that kept her in the job even for this long. We are witnessing a broken party and a broken Government, both of which are breaking this country.”
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