Outgoing Education Secretary Michael Gove will be paid at minister of state level, £35,825 less than his current salary, the Prime Minister's spokesman has confirmed.
Mr Gove will receive a total £98,740 salary rather than the £134,565 he previously received as Education Secretary.
"He will received the same salary as the previous Chief Whip which is a minister of state salary," the spokesman said.
David Cameron has hailed outgoing Education Secretary Michael Gove as "one of my big hitters, one of my real stars" and said he was pleased to have moved him into one of the most important jobs in government.
Portsmouth North MP says she is "proud" of being promoted in the cabinet reshuffle.
She told The News that it is a very huge honour to have been made a member of the government.
The National Union of Teachers General Secretary Christine Blower said teachers across the country will be "wreathed in smiles" at the news that Michael Gove has lost his post as Education Secretary.
Ed Vaizey has been promoted to a new role with the Department for Culture, Media and Sport, overseeing the digital industries, the prime minister has announced.
Nick Gibb returns to Government as Minister of State for Schools - working with Nicky Morgan to ensure no let up in education reforms.