Michaelia Cash will lead the government’s employment push, while Peter Dutton will take up his new position as leader of a powerful Home Affairs office
The Turnbull Government will take a rejigged leadership team into 2018, with a new Attorney-General replacing George Brandis and a new Home Office led by Peter Dutton driving policy on national security.
The prime minister announced the Christmas-week cabinet reshuffle on Tuesday afternoon.
George Brandis has resigned as Attorney-General and will be replaced by the former Social Services minister Christian Porter.
Mr Turnbull confirmed he would recommend Senator Brandis for a new position as Australia’s High Commissioner to the UK "early in the new year".
He praised Senator Brandis' time in office and said new foreign interference laws introduced in the final week of parliament for this year would be an "important part of his legacy".
Immigration Minister Peter Dutton will step up to become the Minister for Home Affairs, responsible for national security, as was flagged earlier in the year.
Michaelia Cash, already Employment minister, will be promoted to the new title of Minister for Jobs and Innovation.
She will also surrender her title as Minister for Women, which will be taken by Kelly O’Dwyer.
Bridget McKenzie, who recently replaced Fiona Nash as the deputy leader of the Nationals, has also entered the parliament. She will be the new Minister for Sport, Rural Health and Regional Communications.
Dan Tehan has also been promoted to the cabinet, taking over Mr Porter's previous position as Minister for Social Services.
Nationals dump Chester as Joyce takes over Infrastructure
Nationals leader Barnaby Joyce will leave his Agriculture portfolio to become minister for Infrastructure and Transport, while newly promoted David Littleproud will take his old job.
The previous Infrastructure minister, Darren Chester, has been demoted from the cabinet.
Mr Turnbull said the government would "continue to call on his wisdom" and that he did "regret" the demotion.
The prime minister said the decision was made on advice from Barnaby Joyce, who wanted the National's strong Queensland presence better-represented in the parliament.
Mr Chester is a Victorian National.
Labor leader Bill Shorten said the decision to drop the "capable" Mr Chester was a sign of a "civil war" in the Nationals partyroom.
Mr Chester said while he was "disappointed", he looked forward to many more years in the parliament. He said he would be a "very active backbencher" and focus on his local electorate of Gippsland.
Home Affairs 'super ministry' takes shape
Peter Dutton will lead the new Home Affairs portfolio, which will take responsibility for Australia's intelligence agencies, national security and immigration.
The new ministry, modelled off the UK's Home Office, will oversee the domestic spy agency ASIO and the Australian Federal Police. Mr Dutton's former Immigration ministry will be run out of the same office.
There will be two more junior ministers beneath Mr Dutton.
Angus Taylor will be Minister for Law Enforcement and Cyber Security, while Alan Tudge will become Minister for Citizenship and Multicultural Affairs.
Shorten accuses government of bias against women and Tasmanians
The opposition leader, Bill Shorten, said the lack of any Tasmanians in the cabinet was a sign of an "anti-Tasmanian bias".
"We all know Malcolm Turnbull doesn’t like going to Tasmania," he said.
Mr Shorten also accused the government of failing to promote enough women to cabinet, despite the promotions for Kelly O'Dwyer and Bridget McKenzie.
"(The Coalition) are not good at encouraging women," Mr Shorten said.
Women in the federal Coalition, including Senator Jane Hume, have previously called for more women to be promoted within the party.