Serdyukov, a former furniture salesman, entered public service as a tax official and quickly rose through the ranks to become head of the Russian tax service before being appointed defense minister in 2007. Russian media have speculated that he owed his quick career to marrying a daughter of Viktor Zubkov, a close associate of Putin who was prime minister in 2007-8 and now serves as chairman of state-controlled gas monopoly Gazprom.
Some Russian media reports linked Serdyukov's ouster to his connections with Vasilyeva, which reportedly angered his father-in-law. But most observers agreed that while a family conflict could have triggered his firing, the real reason behind it could be a clash of interests over a costly military modernization program.
Serdyukov was widely hated by many in the military for his reform that dismissed as many as 200,000 officers, disbanded many units and turned plenty of military assets over to civilian hands. Over the past few years, he also has been locked in conflicts with defense industries over purchasing new weapons, pushing them to lower prices.
Speculation about his dismissal had floated around for years, but he had received Putin's staunch backing until now. Putin authorized and publicly praised Serdyukov's reforms, and it was not immediately clear if his legacy will now be reviewed.
The appointment of Shoigu, who had served as the nation's Emergency Situations minister for two decades before being appointed the regional governor half a year ago, will likely be welcomed by many in the military.
"Shoigu may now find himself in a difficult position facing the pressure for revising what has been done," military analyst Alexander Golts said on Ekho Moskvy radio.
Vladimir Isachenkov contributed to this report.