Kuwait's ruler on Wednesday appointed Defence Minister Sheikh Jaber Mubarak al-Sabah as the new prime minister of the oil-rich Gulf state, state-run Kuwait Television announced.
"An emiri decree was issued appointing Sheikh Jaber Mubarak al-Sabah as prime minister," the report said.
Emir Sheikh Sabah al-Ahmad al-Sabah asked the new premier to form the cabinet which will be the eighth since February 2006 when the former premier was appointed to the post.
Sheikh Jaber, a senior member of the ruling family, replaces outgoing premier Sheikh Nasser Mohammad al-Ahmad al-Sabah who quit on Monday under pressure from the opposition and after graft charges.
Sheikh Jaber, 69, has been in the cabinet since 2001 and was also the first deputy premier in the outgoing cabinet.
Opposition Islamist MP Falah al-Sawwagh told AFP on Wednesday the new government is likely to be a transitional cabinet mainly to oversee the next election after dissolving parliament.
Sawwagh said that a decree by the emir dissolving parliament and calling for snap polls "was expected to be issued late Wednesday." The current parliament's term end in May 2013.
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New elections have to be held within two months, according to Kuwaiti law.
Kuwaiti opposition MPs have repeatedly called for dissolving parliament as members of the 50-strong house are facing allegations of corruption.
Sawwagh told reporters that the Kuwaiti opposition decided after a meeting Wednesday to "suspend all mass rallies in respect for the emir who is currently taking decisive decisions."
The Kuwaiti opposition and youth activists have been launching a campaign since March to oust the former prime minister accusing him of failure to fight corruption and manage the wealthy Gulf state effectively.
The campaign intensified in August after allegations that about 15 pro-government MPs received illegal deposits into their bank accounts estimated by the opposition at $350 million.
At a massive opposition-sponsored rally on Monday, MPs appealed to the emir to dissolve parliament saying they cannot sit with suspected corrupt lawmakers in the same chamber.
Kuwait is OPEC's third largest producer, pumping around three million barrels per day. It has amassed over $300 billion in surpluses but development has been stalled due to almost non-stop political disputes.
During the past five years, Kuwait had seven governments and parliament was dissolved on three occasions.