The rubber-stamp National People's Congress endorsed the appointment of Foreign Minister Wang Yi, 64, as state councillor, making him a ranking member of the country's "cabinet".
He replaces Yang Jiechi, China's former top diplomat, who was tipped for a leading role in managing Beijing's increasingly uncertain relations with the US under President Donald Trump.
While Yang was known for his good relationships with former US officials, it is unclear what advantages Wang, who was once ambassador to Japan, would have for handling the sensitive relationship at a time of growing trade tensions.
China's chief diplomat also faces ongoing regional maritime disputes in the South China Sea, with Beijing facing criticism over its construction of artificial islands capable of hosting military equipment.
Monday's government reshuffle included the naming of General Wei Fenghe, 64, as minister of defence.
He was formerly the head of China's strategic missile force and is seen as having played a key role in President Xi Jinping's effort to reform the military.
Earlier this month, Beijing announced an 8.1 percent increase in military spending in 2018 as it seeks to modernise its forces and expand its capabilities. China opened its first overseas base in the Horn of African country of Djibouti last year.
Wang and Wei were among a raft of appointments approved by the parliament, including US-educated economic reformer Yi Gang as the new governor of the central bank and Fu Zhenghua as the new minister of justice.
Fu, who was once Beijing's top cop, is thought to have led the investigation into Zhou Yongkang, the former security czar who was jailed in 2015 as part of Xi's anti-corruption campaign.
Commerce Minister Zhong Shan was kept at his post and faces the tough task of dealing with a potential trade war with the United States.
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