Dinesh Gunawardena, a veteran politician and a close ally of the Rajapaksa family, was appointed on Friday as Sri Lanka's prime minister as President Ranil Wickremesinghe swore in his 18-member Cabinet in the hope of ending the political instability and the unprecedented economic crisis in the country.

The Cabinet was sworn in on Wickremesinghe's first day in office.

Apart from Prime Minister Gunawardena, there are 17 other ministers in the Cabinet.

Ali Sabry, who earlier headed the finance ministry, was appointed as foreign minister.

Prime minister Gunawardena has been given an additional portfolio of Public Administration Home Affairs, Provincial Councils and Local Government.

The rest of the ministers were retained with their same portfolios while President Wickremesinghe continues to hold the ministry of finance.

Wickremesinghe said he was taking steps to form an all-party government to handle the island's worst-ever economic crisis.

The crisis and its public revolt ousted former President Gotabaya Rajapaksa, paving way for Wickremesinghe to be appointed through Parliament for the rest of his term.

A stalwart of Sri Lankan politics, Gunawardena, 73, earlier served as the foreign minister and education minister. He was appointed as Home Minister in April by then President Gotabaya Rajapaksa.

The prime minister's post fell vacant after Wickremesinghe, 73, was on Thursday sworn in as the country's eighth president after Gotabaya Rajapaksa fled the country and then resigned as president.

A schoolmate of President Wickremesinghe, Gunawardena, has held various Cabinet posts in the past.

Born in 1949, Gunawardena is the leader of the Trotskyist majority nationalist Mahajana Eksath Peramuna (MEP), a constituent party of the ruling Sri Lanka Podujana Peramuna (SLPP) party.

He succeeded his father Philip Gunawardena in 1979 to lead the party after returning from the Netherlands where he completed his higher studies.

His father was a prominent figure in the leftist socialist movement in the British era prior to the country's independence in 1948. The MEP became the ruling alliance in 1956.

Gunawardena entered parliament for the first time in 1983 from the populous Colombo suburb of Maharagama and became a leading opposition figure until 1994.

He became a Cabinet minister for the first time in 2000. He continued in senior cabinet positions until 2015.

He is a widower and has one son, who is also a Member of Parliament.

The appointment of the new Cabinet came hours after Sri Lankan security forces cleared a protest camp near the presidential palace and made several arrests.

Wickremesinghe, who was on Thursday sworn in as the country's eighth president after he won a parliamentary ballot, earlier said he intends to take legal action against protesters who continue to occupy the President's Office.

The new government faces the task of leading the country out of its economic collapse and restoring order after months of mass protests.