Sarkozy's 15-strong Cabinet is half the size of previous Cabinets, and seven posts in it have been given to women, including Michele Alliot-Marie as interior minister, Christine Lagarde as agriculture minister, and Rachida Dati as justice minister. Dati, of North African origin, is also France's first senior politician from an ethnic minority.
Socialist Bernard Kouchner has been named the new foreign minister, and Centrist Herve Morin, defense minister.
The outspoken left-winger Kouchner, a former French health minister and UN governor of the Serb province of Kosovo, is, perhaps, the most unorthodox choice for France's new conservative-led government, analysts say.
A co-founder of the aid agency Medecins Sans Frontieres, Kouchner is internationally renowned for his humanitarian work, and experts suggest the "French doctor" could help Sarkozy translate into reality his election promise to put human rights at the center of French diplomacy.
Sarkozy has made Former Prime Minister Alain Juppe the de facto number two in his government, putting him at the helm of a newly-formed environment, sustainable development, energy, and transport ministry.
Juppe, once the right-hand man of former President Jacques Chirac, was forced to quit politics in 2002 over a scandal involving party funds. He then spent several years teaching in Canada, where he became closely involved with ecology issues, gaining expertise much needed by Sarkozy if he is to deliver on his pledge to reduce climate change and other environmental hazards.
Outgoing employment minister Jean-Louis Borloo has been put in charge of a new economic strategy ministry while Eric Woerth, the former treasurer of the ruling UMP party, has been named the minister in charge of public accounts.
The two men will face the challenge of pushing through Sarkozy's liberal economic agenda, which aims to put France back to work by simplifying employment contracts, allowing overtime, slashing social benefits, and cutting down on civil service costs.
Brice Hortefeux, a member of the president's inner circle, has been entrusted with the top job at a new immigration and national identity ministry. This is viewed as one of the key posts in Sarkozy's new cabinet, with immigration control high on the former hard-line interior minister's list of priorities.
On Thursday, Sarkozy appointed Francois Fillon, representing the moderate wing of the ruling Conservative party, as the new prime minister.
Sarkozy's first cabinet is a break from previous governments not just in terms of size and diversity, but also in terms of age, with the French political elite long dominated by seniors over 60 years of age.
On the ambitious 52-year-old reformer's team, by contrast, many members are below his age, with the youngest being Valerie Pecresse, 39, a UMP party spokeswoman taking charge of higher education and research.
The new cabinet will hold its first meeting at 4:30 p.m. (2:30 p.m. GMT) Friday, the president's secretary general, Claude Gueant, said.
Sarkozy, who received more than 53% in the May 6 presidential runoff, is now trying to rally support for his Union for a Popular Movement (UMP) ahead of parliamentary polls June 10 and 17. Should the ruling party lose its majority in the upcoming ballot, the president will have to form a new, more inclusive cabinet.