Saudi Prince Mohammed bin Salman has replaced his cousin Mohammed bin Nayef as crown prince - next in line to the throne - in a royal decree issued via the Saudi kingdom's state media agency SPA on Wednesday.

While bin Salman's promotion and bin Nayef's ouster were reportedly widely expected within royal circles, the timing is surprising. Saudi Arabia finds itself in a bitter diplomatic dispute with Qatar and Iran, and locked in a two-year-long air war in Yemen.

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Prince Mohammed bin Nayef, who is King Salman's nephew, was widely praised for his role as Saudi Arabia's counter-terrorism chief and for suppressing an al-Qaida bombing campaign against the kingdom between 2003 and 2006. Nevertheless, he was relieved of all his roles.

Bin Salman, meanwhile, will maintain his position as defense minister, holding responsibility for one of the world's biggest arms budgets as well as the kingdom's military intervention in Yemen.

A public pledging of loyalty for him is scheduled to take place later on Wednesday.

New leader for a new generation

Mohammed bin Salman's ascent to being one step away from the throne was seen as symbolic recognition on behalf of the king to Saudi Arabia's youthful population, more than half of which is under 25 years old.

The newly appointed 31-year-old crown prince will be the first of a new generation of Saudi royals to take power. He is the great-grandchild of the kingdom's founder, the late King Abdul-Aziz.

Bin Salman was one of the most ardent proponents for the kingdom's Vision 2030 program, a wide-ranging plan to introduce social and economic reforms to the kingdom's oil-dependent economy. As part of the plan, Saudi Arabia cut back of many state lavish subsidies and proposed the partial privatization of the kingdom's state oil company, Saudi Aramco.

While the proposals to rid Saudi Arabia of its "addiction" to oil have prompted unease many senior officials, they have been widely welcomed by younger Saudis.

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Bin Salman also chaired the country's Council of Economic and Development Affairs, coordinating socio-economic policies in the kingdom such as education, housing, and women's rights. However, it remains unclear where he stands on the Saudi kingdom's harsh freedom of speech laws. He also heads the supreme board of Saudi Aramco.

However, his rise to power has been rapid since his father assumed the throne in January 2015. Many have scrutinized the king's decision to brush aside many of his more well-known, and sometimes better qualified, cousins in favor of closer relatives.

dm/sms (AP, AFP, Rueters, dpa)