On Sunday, Field Marshal Hussein Tantawi was replaced as defense minister with Major General Abdel Fattah al-Sisi.
Mahmoud Makki, a former judge, was also appointed vice president.
Last week, Morsi sacked the country’s intelligence chief, the Republican Guard commander and the head of the military police days after gunmen killed 16 Egyptian border guards at a checkpoint near Egypt’s border with Israel.
The moves seem to be in response to the deadly violence at Egypt's border with Israel.
Under a constitutional declaration issued on June 17, the Supreme Council of Armed Forces (SCAF), which assumed power following the ouster of the Egyptian dictator Hosni Mubarak, took control of the state budget and gave itself veto power over a new constitution, diminishing president’s powers.
Morsi was elected president on June 24 in a runoff against Ahmed Shafiq, who had served as Mubarak's last prime minister.