General David Petraeus is to take over the CIA and current director Leon Panetta is to become US defence secretary in the latest reshuffle in Barak Obama's administration.
The shakeup ahead of the 2012 presidential election could have broad implications for the administration, which is seeking deeper Pentagon spending cuts and aims to start withdrawing US forces from Afghanistan in July.
Mr Panetta, a Democratic Party insider and former White House budget chief, is expected to oversee steady declines in Pentagon spending that diverts weapons dollars to the Treasury Department to help reduce the US deficit.
The departure of Gen Petraeus, considered one of the top US commanders, mixing political savvy with military know-how, also raises big questions about the future of the unpopular, nearly decade-old war effort in Afghanistan.
Analysts fear his departure could derail momentum and undermine efforts to improve US ties with Pakistan.
The White House declined formal comment on the changes, but a senior Obama administration official said Gen Petraeus would retire from the military to take the CIA job.
The shakeup will also include Obama's nomination of the trouble-shooting diplomat Ryan Crocker - who has served as ambassador to Iraq, Pakistan, Syria, Kuwait and Lebanon - as the US ambassador to Afghanistan.
Lieutenant General John Allen, deputy commander of US Central Command, will succeed Petraeus as head of the Afghan war effort, US officials said.
The White House hopes Panetta will be able to assume his post on July 1, pending Senate confirmation. Petraeus would take his job at CIA headquarters by the beginning of September.
Reuters