Saudi Crown Prince Mohammed bin Nayef has been relieved of his post and replaced by Deputy Crown Prince Mohammed bin Salman, a royal decree said on Wednesday, in a promotion for King Salman's 31-year-old son that confirms him as next ruler of the kingdom.

Prince Mohammed bin Salman becomes deputy prime minister and retains his defence and other portfolios, the decree issued by the Saudi state news agency SPA said.

Prince Mohammed bin Nayef, for years the kingdom's counter-terrorism chief who put down an al Qaeda campaign of bombings in 2003-06, is relieved of all positions, it said.

Even as deputy crown prince, Mohammed bin Salman has been responsible for running Saudi Arabia's war in Yemen, dictating an energy policy with global implications and behind the plans for the kingdom to build a future after oil.

Al Arabiya television reported that the promotion of the prince was approved by the kingdom's Allegiance Council, and that the king had called for a public pledging of loyalty to Mohammed bin Salman on Wednesday evening in Makkah.

The surprise announcement follows 2.5 years of already major changes in Saudi Arabia, which stunned allies in 2015 by launching a war in Yemen, cutting old energy subsidies and in 2016 proposing partly privatising state oil company Aramco.