Piyush Goyal will temporarily take additional charge of the finance ministry until Finance Minister Arun Jaitley recovers after undergoing a kidney transplant, President Ram Nath Kovind said in a statement on Monday.
Jaitley, who largely worked from home over the past month, was admitted to the All India Institutes of Medical Sciences (AIIMS) in New Delhi on Saturday.
"The surgery has been successful. Both the recipient and donor are stable and recovering well," the hospital said in a statement on Monday, adding that Jaitley is stable.
Jaitley could be out of action for about a month following surgery, a finance ministry official said.
Jaitley, 65, is a prominent member of Prime Minister Narendra Modi's government. In 2014, Jaitley had gastric bypass surgery to keep his diabetes in check.
Last month, he cancelled trips to London and Washington due to ill-health.
Goyal will also handle the Ministry of Corporate Affairs, which is overseen by Jaitley.
As part of a broader cabinet reshuffle, Rajyavardhan Singh Rathore also replaced Smriti Irani as minister of information and broadcasting.
The move comes weeks after the broadcasting ministry said India would deny government access to journalists who publish fake news.
The decision, taken when Irani was the minister, was heavily criticised and labelled as an attack on the freedom of the press in the world's largest democracy.
Irani will remain India's minister of textiles.
S.S. Ahluwalia has also been made junior minister in charge of the Ministry of Electronics & Information Technology. He will be relieved of his duty as junior minister of the Ministry of Drinking Water & Sanitation.