Egypt's interim prime minister Ibrahim Mahlab has said his cabinet has resigned.

The move allows President Abdel Fattah al-Sisi to choose a new team on his first day in office.

The ex-army chief was sworn in yesterday, nearly a year after he ousted elected president Mohammed Mursi after millions protested against the Islamist's divisive one year rule.

The government installed by Mr Sisi, who has been the de facto leader since he toppled Mr Mursi, resigned to allow the new president to "choose an appropriate one to serve the nation," Mr Mahlab said in a statement.

"I assure you that along with the ministers ... I exerted all efforts to accomplish the duties we were tasked with in very difficult circumstances," Mr Mahlab said.

Since Mr Mursi's ouster, Egypt has been deeply polarised and its economy has nosedived on falling tourist revenues and investments.

Egyptian newspapers reported that Mr Sisi is expected to ask Mr Mahlab to continue in his post, but would make minor changes to the cabinet.

The government has carried out a brutal crackdown on the former president's Muslim Brotherhood in which more than 1,400 people have been killed and thousands more jailed.

Hours after his inauguration, Mr Sisi, in a warning to the now blacklisted Muslim Brotherhood, said there will be "no leniency and truce with those who resort to violence".

"I am looking to a new era built on reconciliation and tolerance ... except with those who committed crimes or used violence as a tool," he said yesterday in his first national address as president.

"I am saying clearly that those who shed the blood of the innocent and killed ... the sons of Egypt, they don't have a place in (our) march."

Western countries, alarmed by the brutal police crackdown on dissent, were represented at his inauguration mostly by low-level representatives.

Mr Sisi becomes Egypt's second elected president since a popular uprising overthrew long-time strongman Hosni Mubarak in 2011, unleashing more than three years of political turmoil.