State-run television broke into its regular programming to report that Mubarak named Ahmed Nazief, the 52-year-old former state minister for communications and information, to replace Egypt's prime minister of the past four years, Atef Obeid.
The resignations of Obeid and 32 ministers were announced after an emergency cabinet meeting late Friday, marking the first cabinet reshuffle since July 2002.
The cabinet's resignation, which had been expected for some time, came amid growing calls for Mubarak, Egypt's major powerbroker, to undertake major reforms of the Arab country's political, economic and social landscape.
A defense official, speaking on condition of anonymity, said Mubarak was expected to replace most of his longtime cabinet ministers and closest aides with new faces.
Speculation of a change of Egypt's old guard was fueled when Mubarak earlier this month removed one of his closest aides, Information Minister Safwat el-Sherif, from a post he held for 22 years.
The official said that Mubarak has given his new prime minister 24 hours to form a new cabinet. The prime minister's task is to run Egypt's day-to-day activities.
Mubarak has been president since the 1981 assassination of predecessor President Anwar Sadat and has no chosen successor. His lengthy term in office and recent health concerns, marked by an operation this month to repair a slipped disc in Germany, has fueled calls for the 76-year-old president to appoint a successor.
Many believe that Mubarak, whose current five-year term ends in October 2005, is grooming his son, Gamal, to succeed him, but both have denied this.
Gamal Mubarak, 40, heads the ruling National Democratic Party's policy-making committee and has taken on increased public exposure in Egypt.
By Maggie Michael