SYDNEY - Australian political heavyweight John Faulkner was appointed the country's new defence minister on Friday, a day after his predecessor was forced to step down in disgrace.

Faulkner, 55, a power broker in the ruling Labor Party, has served as special minister of state since Prime Minister Kevin Rudd took over government in a landslide 18 months ago.

"Senator Faulkner is a man of great character, of great integrity and one of the most experienced and most accomplished ministers in cabinet," Rudd told reporters.

Faulkner served as veteran affairs minister and minister for defence science and personnel in previous Labor governments.

He had been tipped as the frontrunner for the job, the focus of which will be implementing reforms set out in a blueprint to overhaul the Australian defence forces over the coming years.

"It is a great honour, certainly a responsibility and, I would acknowledge, a challenge to be Australia's defence minister," Faulkner said.

"I am delighted that the prime minister has asked me to take on this responsibility, though like him and my colleagues, disappointed in the particular circumstances," he said.

Faulkner was named to the key portfolio a day after Joel Fitzgibbon stepped down following the latest in a series of controversies involving breaches of government transparency rules.

He quit after it emerged that he called an army general in charge of defence health services to a meeting with his brother, who runs an insurance company.

Fitzgibbon, 47, has been under pressure since March when he admitted not declaring two trips to China paid for by wealthy businesswoman Helen Liu, who has been accused by media of having links to Chinese intelligence.

Rudd said he would make further announcements about cabinet appointments at a later date.