Mikhail Mishustin Photo: AFP

Russian President Vladimir Putin on Thursday signed a decree appointing Mikhail Mishustin as new prime minister, shortly after the former head of the tax service won the backing of parliament.

Mishustin promised "real changes" as he was approved by lawmakers after the Kremlin announced sweeping reform plans.

The lower house State Duma voted overwhelmingly to approve Mikhail Mishustin as premier, less than 24 hours after Russia's political order was shaken by Putin's announcement of constitutional reforms and the resignation of the government.

No MPs voted against his candidacy, although Communist lawmakers abstained.

Speaking before his approval, Mishustin called on parliament to work with him to urgently enact Putin's program. "People should already now be feeling real changes for the better," Mishustin said.

The naming of a new premier was one in a series of bombshell announcements that rocked Russia on Wednesday, when Putin said constitutional reform would change the country's balance of power and his longtime prime minister Dmitry Medvedev resigned along with the cabinet.

Putin's current term as president ends in 2024 and observers say the 67-year-old could be laying the groundwork to assume a new position or remain in a powerful behind-the-scenes role.

Mishustin said his priority would be to "increase citizens' real incomes" but also said the government must "restore trust" with the business community and drive innovation, echoing the state-of-the-nation speech on Wednesday when Putin announced the reforms.

Mishustin assured lawmakers that Russia can afford salary hikes and social payouts announced by Putin, estimating they will cost about 4 trillion rubles ($65 billion) over the next four years.

In his state-of-the-nation speech, ­Putin said he wanted more authority transferred to parliament from the president. He also called for the power of the State Council, an advisory body, to be expanded and enshrined in the constitution.

Putin said on Thursday Russia would remain a presidential republic following the reforms, but it would be parliament not the president who would be picking the government. The president should retain the power to fire officials who fail in their jobs, he said.