Italian Prime Minister Mario Monti on Wednesday stepped down as finance minister to be replaced by the current deputy minister Vittorio Grilli.
He signalled, however, that as Prime Minister he would keep a tight grip on economic policy.
The government said in a statement that Mr. Monti would preside over a new committee for economic and financial policy.
The committee will include Mr. Grilli, Economic Development Minister Corrado Passera and Bank of Italy governor Ignazio Visco.
A former European commissioner and economics professor, Mario Monti replaced Silvio Berlusconi at a time of financial market panic in November 2011 when he also took the post of interim finance minister in a bid to reassure investors.
The nomination announcement appeared to have little impact on the markets, with Milan down 0.41% in line with other European stock exchanges.
Borrowing costs were also down following a Eurogroup meeting this week.
Monti's leadership in the debt crisis and his radical programme of spending cuts and structural reforms are seen as having saved Italy from disaster and uncertainty over what will happen when he leaves is worrying investors.
Monti yesterday said that he intended to step down in time for elections in 2013 and a report today, in an Italian newspaper said that Silvio Berlusconi was planning a comeback and could stand for prime minister again next year.
"The decision has been taken: Berlusconi will once against present his candidacy for the post of prime minister," the Corriere della Sera reported.
The head of Berlusconi's People of Freedom party, Angelino Alfano, said: "There is a major wave of support for Berlusconi to put forward his candidacy.
"Many people are asking him to do this and I am one of them ... I think in the end he will decide to come back," he added.
Monti's comments about 2013 have created "a huge element of political uncertainty," said Michael Hewson from CMC Markets.
Forex trader Moneycorp also pointed out that Monti had left open the possibility that Italy may require European aid to bring down borrowing costs.
Vittorio Grilli is a former economics professor at Yale University in the United States and a graduate from the prestigious Bocconi University in Milan, also the alma mater of Monti who later became the institution's dean.
Before his appointment to Mario Monti's cabinet in November, Mr. Grilli was director general of the Italian Treasury.
He previously worked on a major privatisation programme in the 1990s.
He has also been a managing director for Credit Suisse and an adviser to companies including energy giant Enel and airline Alitalia.
