Reinaldo Gargano, the foreign minister, is a veteran socialist who had been criticised for opposing closer trade ties with the US.
He had also come under fire for feuding with Argentina over environmental concerns raised by a Uruguayan paper pulp plant.
The president's closest aide, presidential secretary Gonzalo Fernandez, replaced Gargano.
Lower profile
Vazquez also announced he was removing Jose Mujica, a former leader of an armed group, as agriculture minister, and was replacing Azucena Berruti with Jose Bayardi at defence.
"The new cabinet will have people close to and in tune with Vazquez, who have a lower political profile but a higher technical profile, " said Juan Carlos Doyenart of the Interconsult business consulting group, an analyst.
"He'll have a cabinet of people who report personally to him instead of to different political groups."
The new ministers will take up their positions on March 1.
The country's first socialist president, Vazquez began his five-year term in 2005 and has led the country during a time of prosperity for Uruguay.
The unemployment rate has is at a 14-year low.