The royal decree came the day after the burial of the late heir to the throne, Prince Nayef, who died last week in Geneva and was the crown prince only since November. Prince Salman, 76, is the third successor for the 88-year-old King Abdullah in the past year.
It reflects the issues of health and age that will one day turn control of the oil giant to a younger generation, as the Mideast is shaken by political upheavals and calls for change that have so far been held back by Gulf leaders.
Salman served for more than four decades in the influential post of governor of Riyadh, the capital, and is the patriarch of family businesses that include stakes in the pan-Arab daily newspaper Al-Sharq al-Awsat, an important media tool for Saudi's rulers.
"This was a cautious moved planned well in advance," said Sami al-Faraj, director of the Kuwait Center for Strategic Studies. "It sends the message that the House of Saud is not ready for a major generational change just yet."
Nayef was considered wary of even the modest changes brought by King Abdullah, including pledges to allow women to vote and run in the next municipal elections in 2015.
Salman's links to Saudi religious charities brought him into controversy as one of the defendants in a lawsuit by insurance companies that accused Saudi Arabia of funneling money to al-Qaida. A U.S. appeals court in New York had ruled in 2008 that the Saudi royal family and other defendants enjoy immunity from such lawsuits.
As part of the succession shake-up, Prince Ahmed was promoted from deputy interior minister to take Nayef's place leading the ministry, which has played the front-line role in crackdowns on Islamic militants following the Sept. 11 attacks. The move appears to put Ahmed, believed to be in his early 70s, in a position to be in line for the throne.
Ahmed is believed to be the 31st son of Saudi's founding monarchy, King Abdul-Aziz, and could offer a position as a bridge between his era as the so-called "third generation"—the hundreds of princes from Abdul-Aziz' children.
Salman has suffered at least one stroke that has left him with limited movement of his left arm, but the full extent of his health condition is unknown. He is known to keep a full work schedule and travels frequently, including a visit to Britain in April to meet with defense officials.
The Saudi ruling family rarely gives details about the medical status of top figures, even when they are hospitalized.