Zuma's U-turn came after the president sacked the previous finance minister, Nhlanhla Nene, last week and replaced him with outsider David van Rooyen. He then changed his mind following a wave of criticism and turmoil in currency, credit and equity markets at the end of the week.
"On the 9th of December 2015, I announced the appointment of a new Minister of Finance, Mr David van Rooyen. I have received many representations to reconsider my decision. As a democratic government, we emphasize the importance of listening to the people and to respond to their views," Zuma said in a statement on the South African government news agency late on Sunday.
"In this regard, I have, after serious consideration and reflection, taken the following decision; I have appointed Mr Pravin Gordhan, the current Minister of Cooperative Governance and Traditional Affairs as the new Minister of Finance."
Gordhan previously held the role of finance minister between 2009 and 2014, before becoming minister of cooperative governance and traditional affairs in May last year.