Chief of General Staff Lieutenant General Dan Halutz appointed his deputy, Major-General Moshe Kaplinsky, to supervise air, sea and land operations as his representative in the north until the end of the war, the military said.
Israeli commentators saw the decision as pushing aside the head of the northern command, Major-General Udi Adam, who has overseen the four-week offensive against Hezbollah so far.
It came as Israel's security cabinet prepares to meet Wednesday to decide whether to approve an expanded ground offensive if diplomatic efforts to end the conflict fail.
There has been criticism of the Israeli military's handling of the offensive, which has so far failed to silence Hezbollah's rockets.
Some 48 percent of Israelis believe that no victor has yet emerged from the conflict, according to a poll released by Israeli public television.
That compared with 28 percent who believe Israel is victorious and 12 percent who see Hezbollah as the winner.
To date, 63 Israeli soldiers have been killed since two of their comrades were captured by Hezbollah in a July 12 cross-border raid which triggered the offensive by Israel. A total of 36 Israeli civilians have died.
More than 1,000 people have been killed in Lebanon, most of them civilians, according to the authorities in Beirut.