Macron, a former partner at Rothschild bank, will work alongside Finance Minister Michel Sapin, 62, a close Hollande ally, to try and reinvigorate the euro zone's second-biggest economy.
The stagnant economy has forced the government to abandon its growth and fiscal targets for this year, while unemployment is at a record high of over 3 million.
Macron will be charged with carrying out Hollande's main economic goals of cutting labor costs, slashing red tape and opening up closed professions such as notaries and pharmacists, not an easy task as the government has a shaky majority with which to push through reforms.
Still, while French CEOs often complained about Montebourg's protectionist policies, Macron won wide respect in the business community within months of becoming Hollande's advisor two years ago.
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"Emmanuel Macron is our relay, our entry point to the president,'' France Telecom chief executive Stephane Richard told Challenges magazine in September 2012. ``I have seen him at Rothschild, he will reassure everybody.''
Macron studied in France's top elite schools, including the ENA civil service school, which Hollande and many top French officials have attended.
"Macron has proven his worth in the Elysee,'' an advisor to Hollande said, referring to the president's official residence. "He knows the business world very well ... and most important of all, the president fully trusts him.''
Tensions between ministries over France's economic policy are a long-standing tradition, but had never been as strong as since Hollande became president in May 2012 and Montebourg took the industry and then the economy portfolio.