Prince Nayef, pictured, was also named prime minister in addition to keeping his job as interior minister [GALLO/GETTY]

Saudi Arabian King Abdullah has appointed Interior Minister Prince Nayef bin Abdul-Aziz as his new heir in the world's top oil exporter.

He succeeds prince Sultan bin Abdul-Aziz, who died last week in New York and was buried on Tuesday in the capital Riyadh.

The royal court statement, read out on state television early on Friday, said the crown prince had been appointed after the king met the Allegiance Council, a family body set up in 2006 to make the process of succession in the conservative Islamic kingdom smoother and more orderly.

He is set to assume the throne upon the death of King Abdullah, 87, who is recovering from his third operation to treat back problems in less than a year.

Prince Nayef, 78, was also named prime minister in addition to keeping his job as interior minister.