Sri Lanka's newly elected president Gotabaya Rajapaksa on Thursday swore in his elder brother, former president Mahinda Rajapaksa, as prime minister.

It is the first time in Sri Lankan history that two siblings have held the two top political positions, although Mahinda is only in charge of a caretaker government until parliamentary elections next year. 

"I wish to congratulate and extend my warmest wishes to Hon Mahinda Rajapaksa, Prime Minister of the Democratic, Socialist Republic of Sri Lanka," Gotabaya tweeted after the swearing-in ceremony which was attended by the the pair's wives, sons and daughters-in-law.  

The appointment of Mahinda Rajapaksa, 74, came hours after the former Prime Minister Ranil Wickremesinghe tendered his resignation following the defeat of his United National Party's (UNP) candidate in the presidential election last week.

Gotabaya, 70, had earlier served as defence secretary under his brother Mahinda, who himself served as president from 2005-2015. 

Mahinda, who had been Sri Lanka's opposition leader since January, has held the prime minister's post twice before. He is set to be the Sri Lanka Podujana Peramuna (SLPP) party's candidate in the parliamentary election expected around April.

The brothers are considered heroes among Sri Lanka's Sinhalese majority and the powerful Buddhist clergy, but Gotabaya has been accused of war crimes in connection with the alleged killing of around 40,000 Tamil civilians in the final stages of a 26-year long civil conflict.

Rights groups have long called for investigations into alleged rights abuses committed during the Rajapaksas' previous terms in power.

Sri Lanka is in its deepest slump in nearly two decades following the Easter Sunday Islamist attacks that killed over 250 people in churches and hotels. That hurt the rupee and the all-important tourism sector. 

Gotabaya's economic manifesto targets average growth of at least 6.5 per cent, compared with 3.2 per cent in 2018, but economists are worried his plans may strain coffers. Managing a record 3 billion U.S. dollars in annual external debt repayments over the next five years will be another challenge. 

 Sri Lanka's stock index and rupee currency have gained 1.9 percent and 0.5 percent respectively since Rajapaksa's election.