Field Marshal Abdel Fattah al-Sisi ditched his military fatigues on Thursday and resigned as Egypt's defence minister, a day after announcing he would run for president.

Sisi turned up in civilian clothes at the weekly cabinet meeting to submit his resignation as minister after quitting as army chief the previous night, state news agency MENA reported.

Meanwhile, General Sedki Sobhi was sworn in as the new defence minister and army chief on Thursday, while Lieutenant General Mahmoud Hegazi replaced Sobhi as army chief of staff, the presidency said. Hegazy is the father-in-law of Sisi's son.

Declaring his widely anticipated candidacy in his televised address to the nation on Wednesday, Sisi vowed to fight "terrorism" and work towards restoring the country's battered economy.

Wildly popular Sisi faces no serious competition in the presidential election to be held before June and is widely seen as the only leader able to restore order after more than three years of turmoil since the Arab Spring overthrow of veteran strongman Hosni Mubarak.

"With all modesty, I nominate myself for the presidency of Egypt," Sisi said in his address to the nation, attired in his field marshal's uniform and sitting behind a desk.

He also vowed to fight militancy, which has killed more than 200 policemen and troops since Sisi's ouster of elected president Mohamed Morsi last July.

Egypt's media hailed his speech, splashing it across their front pages on Thursday.

"Finally, Sisi officially announces candidacy for president," said independent daily, Al-Masry Al-Youm, while state-run Al-Akhbar said: "Sisi starts his walk to presidential palace."

Egyptians in the street too welcomed the announcement, saying it was inevitable that Sisi would become president.

"Sisi is too powerful. If he had remained as defence minister, he would have become a headache for any president. Therefore there is no alternative to him" but to become president, said Ali Amin, who works as a tour operator.

Sisi's candidacy is likely to further inflame Islamist protests and worry those secular activists who fear a return to rule by military men and the strong-arm tactics of the Mubarak era.

Morsi's Muslim Brotherhood rejected his candidacy outright.

"He led a coup to become president. He is a man who has killed daily since the coup," Ibrahim Munir, a member of the Brotherhood's political bureau, told AFP by telephone from London.

Just hours before Sisi's address, clashes between Morsi's student supporters and police killed one protester at a Cairo campus.

- Real power behind Mansour -

Sisi is believed to be the real power behind interim president Adly Mansour, under whose watch police have killed hundreds of Islamist protesters and detained about 15,000 suspects since Morsi's ouster.

The crackdown has worried the international community, which was further outraged after a court this week sentenced to death 529 supporters of Morsi for deadly rioting.

Many Egyptians, deeply disillusioned by the Islamist Morsi's single year in power, have supported the crackdown in the hope of stability.

For those Egyptians who want an end to the unrest that has scared off investors and tourists, dealing a heavy blow to the economy, Sisi's military background is an asset.

The army is seen as the country's most stable institution and Sisi can count on further aid from friendly Gulf states, who have pumped billions of dollars into Egypt since Morsi's ouster.

But analysts say Sisi will face stiff challenges when it comes to tackle the economy and security issues.

"To turn the economy around, deep and painful restructuring is needed, something the military-backed government has avoided so far," said James Dorsey, Middle East Expert at Singapore-based S. Rajaratnam School of International Studies.

"He will lead a deeply divided country in which a significant minority feels disenfranchised. He would need to build bridges to prevent further polarisation and violence."

Karim Bitar, Middle Expert at Paris-based International and Strategic Relations Institute said Sisi's certain electoral victory would bring the military back to the helm of affairs -- where it has been since 1952 except the year of Morsi's rule.

But "Sisi wants to benefit from his popularity before political and social realities erode it," he added.