Michael Gove will leave his job as Education Secretary in a major reshuffle of the top jobs in Government.
The 46-year-old, a controversial figure among many teachers, has been swapped to the role of Commons Chief Whip - a move described as "definitely a demotion" by Sky's Political Editor Adam Boulton.
David Cameron had been expected to promote more women into key posts ahead of next year's General Election.
Nicky Morgan takes over from Michael Gove as Education Secretary The first to secure a high-profile role was Nicky Morgan, the current Minister for Women and Equalities, who will fill the vacancy left by Mr Gove.
It is a rapid rise for an MP who has only held a seat in the House of Commons for four years.
Liz Truss also secures promotion, moving from Education Minister to Environment Secretary to replace Owen Paterson, who became a familiar face during the flooding crisis over the winter.
Liz Truss is the Government's new Environment Secretary The wide-ranging reshuffle also sees the shock departure of William Hague as Foreign Secretary.
The 53-year-old will become Leader of the House Of Commons before standing down as an MP at the next General Election in 2015.
He is replaced by Philip Hammond, who moves from the role of Defence Secretary.
Sky's Political Correspondent Sophy Ridge said: "When they said this would be a significant reshuffle, they actually meant it."
Philip Hammond replaces William Hague as Foreign Secretary A Downing Street spokesman said Mr Hague will help to coordinate government policy and become a "leading campaigner in key constituencies, particularly in the north of England".
He will also be the Prime Minister's special representative on preventing sexual violence in conflict, following his work with UN special envoy and Hollywood actress Angelina Jolie.
Meanwhile, Ken Clarke is retiring from Government and other high-profile Tory MPs have emerged as casualties of the reshuffle, including Policing Minister Damian Green and Attorney General Dominic Grieve QC.
Ken Clarke pictured arriving at No 10 on Monday Mr Clarke, 74, is stepping down as minister without portfolio, bringing to an end a front bench career stretching back to 1972.
Speaking shortly after Mr Hague announced his departure, the Prime Minister said: "Mr Hague has been one of the leading lights of the Conservative Party for a generation, leading the party and serving in two cabinets.
"Not only has he been a first class Foreign Secretary, he has also been a close confidante, a wise counsellor and a great friend."
Mr Hague with Angelina Jolie and US Secretary of State John Kerry Mr Hague said there was a "balance to strike between experience on the one hand and the need for renewal on the other".
"Renewal in politics is good and holding office is not an end in itself," he said.
"After 26 years as an MP, the time will be right for me to move on."
Mr Green has been sacked in a "shock" move and Mr Grieve has also left the Government, Sky sources say.
Welsh Secretary David Jones, Transport Minister Stephen Hammond and Minister for Civil Society Nick Hurd are also out.
International Development Minister Alan Duncan is standing down at his own request, while Universities Minister David Willetts has also stood down and declared his intention to quit as an MP next year.
Mr Jones is set to be replaced by Stephen Crabb, according to Sky sources.
Boulton said: "It's the biggest upheaval in David Cameron's government since he came to power in 2010.
"He is clearly cutting out a lot of, as people are saying, 'pale, male and stale' ministers.
"A lot of them are, frankly, thought to be doing quite good jobs in their ministerial positions."
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