RISHI Sunak is today conducting a mini-reshuffle after Ben Wallace officially stepped down as Defence Secretary.
Energy Secretary Grant Shapps has been appointed his successor, with junior minister Claire Coutinho replacing him.
The PM is replacing the departing Cabinet Minister in a slight shake-up of his top team before the party conference in October.
Downing Street confirmed the move this morning after The Sun last night exclusively revealed plans for today's rejig.
Mr Wallace - who has been Defence Secretary for four years - warned the world will become more dangerous and urged Mr Sunak not to compromise on cash for the armed forces.
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In a parting letter to the PM, he said: "I genuinely believe that over the next decade the world will get more insecure and more unstable.
"We both share the belief that now is the time to invest. Ever since I joined the Army I have dedicated myself to serving my country.
"That dedication however comes at a personal toll to me and my family.
"After much reflection, I have taken the decision to ask that I be allowed to step down.
"I won my seat in 2005 and after so many years it is time for me to invest in the parts of life that I have neglected, and to explore new opportunities."
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Mr Wallace - who is also stepping down as an MP at the next election - had wanted to become Nato chief but had bis bid blocked.
Mr Sunak lavished praise on his departing Defence Secretary for his "exceptional judgement" while in the post.
He said: "I will always be personally grateful to you for your loyalty and advice since I became Prime Minister."
Close pal Boris Johnson added: "Sad to see departure of my friend Ben Wallace.
"A fine Defence Secretary who got so many calls right - especially on Ukraine."
Mr Wallace - whose seat is being abolished at the next election - is understood to have handed over a list of his preferred candidates to No10.
He announced his shock resignation despite being the most popular Cabinet minister among the grassroots, and once the favourite to become PM.
Mr Sunak is expected to save a wider reshuffle of his top team ready for the next election for after party conference season and the King's Speech in November.