Germany’s new government will feature the country’s first female defense minister and the return of a respected former foreign minister, while Chancellor Angela Merkel’s influential finance chief will stay on as she starts her third term.

Merkel’s new “grand coalition” government of right and left is to take office Tuesday _ nearly three months after her conservatives won elections, but fell short of a parliamentary majority and saw their previous pro-business coalition partners lose their seats.

Ursula von der Leyen will become defense chief, Merkel said Sunday. The 55-year-old mother of seven inherits the job of modernizing the military, which is being overhauled after Germany abandoned conscription in 2011, and overseeing its deployment in Afghanistan as combat troops depart.

Von der Leyen has helped modernize the image of Merkel’s party in her previous roles as minister for families and labor. She “has always been interested in international affairs,” Merkel said. “It’s an exciting job, also a challenging job, but I trust that she will master it very, very well.”

Veteran conservative Wolfgang Schaeuble will stay on as finance minister after four years as Merkel’s co-pilot in fighting Europe’s debt crisis _ underlining continuity in Berlin’s approach. The 71-year-old “stands for the stability of the euro and the policies linked with that, for everything that’s important in Europe,” Merkel said.

The current defense minister, Thomas de Maiziere, returns to his previous job as interior minister, Germany’s top security official. He is one of 10 members of the new cabinet from Merkel’s Union bloc; the other six seats went to their new partners, the center-left Social Democrats.

Frank-Walter Steinmeier, who was foreign minister from 2005 to 2009, returns as Germany’s top diplomat. The Social Democrats’ leader, Sigmar Gabriel, described him as “perhaps Germany’s most distinguished foreign policy expert.”

Gabriel will become vice chancellor and head a beefed-up Economy Ministry. He will have full oversight of Germany’s transition from nuclear to renewable energy, marred by bickering between ministries since Merkel’s 2011 move to accelerate the exit from nuclear power.

“We have to make the energy switchover a success,” Gabriel said, stressing that it “brings great opportunities for extra jobs, but it must ensure that Germany remains reliable and ... robust as an industrial location.”

Left-winger Andrea Nahles becomes labor minister, responsible for launching a national minimum wage that was part of the party’s price for going into government.

Joerg Asmussen, currently a member of the European Central Bank’s executive board, will be one of her deputies. Merkel said the new coalition will discuss who to replace him with at the ECB, but didn’t say when.

Deputy Social Democrat leader Aydan Ozoguz, who was born in Germany but has Turkish roots, will become the government official responsible for immigrant issues _ one rung below cabinet rank.

In a change championed by her party, people born in Germany who also hold a non-European Union passport will no longer have to choose one citizenship, largely benefiting children of Turkish immigrants.

Merkel said an extra official will be added at the chancellery to handle intelligence matters as “a consequence of the NSA ... affair.” Germany has been seeking answers from Washington to allegations that U.S. intelligence monitored the chancellor’s cellphone.

There was no immediate word on who will get that job. (AP)