Kiir sacked Defense Minister Angelina Teny, who is also First Vice President Machar's wife, along with the interior minister this month, re-igniting long-standing disagreements over how the two war veterans share power.
According to the decree read on state TV late on Wednesday, Kiir replaced Teny with Chol Thon Balok, a loyal general and former governor of Upper Nile state.
"The appointment of Chol Thon as a minister of defense is unilateral and a new blatant violation of the peace agreement," said Puok Both Baluang, Machar's spokesperson, calling for Teny to be reinstated.
A meeting this month aimed at resolving the rift between Kiir and Machar ended in deadlock.
Kiir and Machar's forces signed a peace agreement in 2018 that ended five years of civil war that killed 400,000 people and triggered Africa's biggest refugee crisis since the 1994 Rwandan genocide.
Implementation of the deal has been slow, and bouts of fighting have continued to kill and displace large numbers of civilians.
The stalemate is likely to cause paralysis in the implementation of the peace deal, which is meant to culminate in a national election at the end of 2024, said Boboya James, a policy analyst at the Juba-based Institute of Social Policy and Research.
"(Kiir) wants to have all the powerful institutions," James said. "What he is doing is to consolidate that level of power between now and towards the elections."
