Karapetyan, who previously served as mayor of the capital city, Yerevan, worked as the first vice-president of Gazprombank - connected to Russia's main oil and gas company, Gazprom - and is currently deputy CEO of Russian gas producer Gazprom's GAZP.MM Mezhregiongaz unit.

The new government is reportedly likely to be temporary, with the new configuration emerging only after the 2017 parliamentary election and the end of Russian-allied President Serzh Sarkisian's second term in 2018, when the transition from a semi-presidential form of government to a parliamentary republic is completed.

Abrahamyan (pictured above with Russian counterpart Dmitri Medvedev) resigned on Thursday saying the country needed fresh policies. He has faced public anger over a hostage crisis this summer, when a group of anti-government gunmen seized a police building in Yerevan for two weeks, killing two police and taking several high-ranking officers hostage. The stand-off led to anti-government demonstrations over the authorities' mishandling of the crisis and demands for Sarkisian's resignation.

The government has also faced other challenges, including violence in Azerbaijan's breakaway Nagorno-Karabakh region in April between Armenian-backed separatists and Azeri forces. Abrahamyan, who was appointed two years ago, has also overseen a deterioration in economic growth, which slowed to 3 percent in 2015 from 3.5 percent in 2014 - below the government's growth forecast of 4.1 percent.

Sarkisian had promised to reshuffle his cabinet after the hostage crisis in July. The former military officer pledged in early August to introduce a government of "national reconciliation," saying that it would take months to get a new team together. He has been president of the country of 2.9 million people in the South Caucasus since winning a vote in 2008.

Armenia depends heavily on aid and investment from Russia, whose economic downturn has hit Armenian exports and remittances from Armenians working there.

jbh/kl (AFP, Reuters)