Presidential spokesman Yasser Ali announced the retirement of Hussein Tantawi (76), head of the armed forces, and the chief of staff, Sami Anan (64). They have been appointed as advisers to Morsi.
Morsi's spokesperson called it a "sovereign" decision by the head of state, and aimed at "pumping new blood" into an army that has shown signs of hoping to control the novice president. A fellow Islamist said Egypt could not go on having "two heads".
The move sidelines Tantawi, Mubarak's defence minister for two decades and whose continued presence had cast a shadow of military rule over the new democracy.
Thousands of Islamist supporters gathered in Cairo's Tahrir Square and other cities to back Morsi's decision.
In his place as armed forces chief and defence minister, Morsi appointed General Abdel Fattah al-Sisi (57) from military intelligence.
Enan was replaced General Sidki Sobhi (56) who headed the Third Field Army based in Suez, on the border with Sinai.
By scrapping the army's constitutional declaration, Morsi can also take on the legislative powers the generals had sought to keep for themselves in the absence of a Parliament. In June, the military council, backed by judges, dissolved the Islamist-led assembly elected in January – a move Morsi has challenged.
Enan was long seen as particularly close to the Pentagon, the main sponsor of Egypt's armed forces. Washington gives Egypt $1.3-billion in military aid each year.
The April 6 youth movement, which helped galvanise the revolt against Mubarak, described Morsi's move as the "first step towards establishing a civilian state", it said on its Facebook page. "We want a strong, national army to protect the nation and that does not intervene in politics".
The armed forces, with vast resources in Egypt's economy as well as a military strength funded in part by Washington, remain a key institution in Egypt and the process of establishing full democratic control has only just begun.
Morsi, whose election victory prompted concerns in Israel and the West about alliances with Egypt, also appointed a judge, Mahmoud Mekky, as his vice-president.
Morsi, who has pledged to uphold democratic accountability and to stand by Cairo's treaties with Israel and other states, has shown impatience with the military following violence in the Sinai desert that brought trouble with Israel and the Palestinians' Gaza Strip enclave this month.
Monday, 13 August 2012
Darul Ihsan Media Desk