Britain's Prime Minister, Theresa May, speaks to the media outside number 10 Downing Street, in central London, Britain July 13, 2016.[Photo/Agencies]

New UK Prime Minister Theresa May stunned the British political world by naming former rival Boris Johnson to the key post of Foreign Secretary only hours after she formally accepted Queen Elizabeth's invitation to form a government.

Former Chancellor of the Exchequer George Osborne, who served for six years alongside old school friend David Cameron, was told by May there was no new role for him in her government, and resigned.

Philip Hammond, who served as Foreign Secretary and Defence Secretary under Cameron, took over as Chancellor.

Cameron quit after Britons dramatically voted in favour of leaving the European Union in a June 23 referendum. Johnson, the flamboyant former Mayor of London who upset many senior Conservative Party politicians by opting to head the Leave campaign, had originally been tipped as a future prime minister.

But he was sensationally pushed out of the running to succeed Cameron when his campaign manager, Michael Gove, abruptly announced he was running himself. He withdrew and most expected him to vanish into political obscurity.

May also named a veteran Conservative Party legislator, David Davis, as Secretary of State in charge of negotiating the exit process from the EU. Amber Rudd, who has only been in the cabinet for a year, took over the Home Office rule, formerly held by May.

A former defence secretary, Liam Fox, was named to the new post of International Trade Secretary, and will be given the task of negotiating fresh bilateral deals, especially with China.

Queen Elizabeth II welcomes Theresa May, left, at the start of an audience in Buckingham Palace, London, where she invited the former Home Secretary to become Prime Minister and form a new government, July 13, 2016.[Photo/IC]

Related: UK's Theresa May faces list of major problems as she becomes PM

Theresa May, the 59-year-old daughter of a Church of England vicar, took over as UK prime minister at one of the most turbulent times in modern British politics.

May, who was the longest-ever holder of the post of Home Secretary, or interior minister, became the only candidate to replace David Cameron after her last rival dropped out on Monday.

In a ceremony that has been repeated 13 times since Queen Elizabeth ascended to the throne in 1952, Cameron drove to Buckingham Palace for a last audience where he formally tendered his resignation and then recommended to the monarch that May be appointed in his place.

Her appointment means an end to six years of the country's top post being held by an Old Etonian, Britain's leading private school. May, from the southern city of Oxford, attended a state secondary school before gaining a place at Oxford University. She is Britain's second female prime minister; the first was Margaret Thatcher, who served from 1979 to 1990.

Top of May's list will be how to handle what has become known as Brexit, the process of Britain leaving the European Union after 51.89 percent of the country's voting population elected to leave the EU in a controversial referendum last month.

Although May herself voted to remain in the EU, she told reporters after winning the prime ministerial race: "Brexit means Brexit."

Although the EU negotiations are top of her list of things to do, the economy is not far behind – although stock markets have rallied since plunging on the morning of the referendum result, the pound has yet to regain the losses it made against the US dollar, as it fell to its lowest point in 31 years.