"We are appointing Shaikh Muhammad bin Zayid deputy crown prince effective immediately," said a decree by Shaikh Zayid, carried by WAM, the UAE's official news agency.
Shaikh Muhammad, 42, has headed the UAE's armed forces since 1993. He is a graduate of Britain's Sandhurst military academy.
Abu Dhabi's crown prince is Shaikh Zayid's eldest son, Shaikh Khalifa.
Shaikh Zayid, who is in his 80s, has had a number of health problems in recent years, fuelling speculation about who will succeed him.
He underwent an operation to remove gallstones in Britain in early November, a kidney transplant in 2000 and neck surgery in September 1996.
Shaikh Zayid has led the UAE federation which includes Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al-Khaimah, Sharjah and Umm Al-Qaiwain since it was established in 1971, following Britain's pullout from the Gulf.