Mr Zahawi said on Twitter that it had been 'an honour to serve as Children's Minister' and thanked his 'brilliant team' at the Department for Education.
He has been appointed a parliamentary under-secretary of state in the Department for BEIS to work with the newly-appointed business secretary Andrea Leadsom.
It has not yet been confirmed who will replace Mr Zahawi as children and families minister.
Mr Zahawi, who has been MP for Stratford-upon-Avon since 2010, was appointed children's minister by Theresa May in January last year during a reshuffle, at the same time as Damian Hinds became education secretary.
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