Mr Turnbull has appointed Scott Morrison as treasurer, in his new cabinet in an effort to mend party divisions following the ousting of Tony Abbott.
Other changes in the much anticipated reshuffle are the appointment of Marise Payne as defence minister, one of five women in the new cabinet, and former education minister Christopher Pyne as industry, innovation and science minister.
Mr Abbott was ditched last Monday after months of destabilising infighting.
Ousted defence minister Kevin Andrews said he was disappointed his offer to work with the new Liberal leader had been refused.
Mr Andrews, who joined parliament in 1991, held the defence portfolio for less than a year and had been talked about as one of the most high profile losers in Mr Turnbull's new cabinet.
Ms Payne, a little-known senator, would be the country's first female defence minister.
Mr Turnbull revealed that Abbott government treasurer Joe Hockey intended to resign from parliament in due course.
Bruce Billson, Eric Abetz and Ian Macfarlane were among other senior names dumped from cabinet.
The prime minister has more than doubled the number of women around the cabinet table.
Deputy leader Julie Bishop kept the foreign affairs portfolio.
The removal of Abbott and loyalists was seen as a setback for Japan's bid to win a $35 billion programme to build stealth submarines for Australia.