Cuban President Raul Castro has he will step down from power after his second term ends in 2018.
The new parliament has named a 52-year-old rising star to become his first vice president and most visible successor.
"This will be my last term," Mr Castro, 81, said shortly after the National Assembly elected him to a second five-year tenure.
In a surprise move, parliament named Miguel Diaz-Canel as first Vice President, meaning he would take over if Mr Castro cannot serve his full term.
Mr Diaz-Canel is a member of the political bureau who rose through the Communist Party ranks in the provinces to become the most visible possible successor to Mr Castro.
Mr Castro starts his second term immediately, leaving him free to retire in 2018, aged 86.
Former president Fidel Castro joined the National Assembly meeting yesterday, in a rare public appearance.
Since falling ill in 2006 and ceding the presidency to his brother, the elder Castro, 86, has given up official positions except as a deputy in the National Assembly.
The new government will almost certainly be the last headed up by the Castro brothers and their generation of leaders who have ruled Cuba since they swept down from the mountains in the 1959 revolution.
Cubans and foreign governments were keenly watching whether any new, younger faces appeared among the Council of State members, in particular its first vice president and five vice presidents.
Their hopes were partially fulfilled with Mr Diaz-Canel's ascension. He replaces former first vice president, Jose Machado Ventura, 82, who will continue as one of five vice presidents.
Commander of the Revolution Ramiro Valdes, 80, and Gladys Bejerano, 66, the comptroller general, were also re-elected as vice presidents.
Two other newcomers, Mercedes Lopez Acea, 48, first secretary of the Havana communist party, and Salvador Valdes Mesa, 64, head of the official labour federation, also earned vice presidential slots.
Esteban Lazo, a 68-year-old former vice president and member of the political bureau of the Communist Party, left his post upon being named president of the National Assembly.
He replaced Ricardo Alarcon, who served in the job for 20 years.
Six of the Council's top seven members sit on the party's political bureau which is also led by Raul Castro.
The announcement came as little surprise to Cuban exiles in Miami.
"It's no big news. It would have been big news if he resigned today and called for democratic elections," said Alfredo Duran, a Cuban-American lawyer and moderate exile leader in Miami who supports lifting the US trade embargo against Cuba.
"I wasn't worried about him being around after 2018," he added.