South Sudan President Salva Kiir has named his transitional unity government sharing power with former rebels, a key step in a long-delayed peace process, a decree read out Friday said.

Under an August 2015 peace deal, the 30 posts of ministers are split between Kiir, his long-term rival and first vice president Riek Machar, opposition and other parties.

Kiir's decree "for the appointment of ministers of the transitional government of national unity" was broadcast on government radio on Friday morning.

Machar returned to the capital Juba on Tuesday and was immediately sworn into the post of vice president, a position he was sacked from five months before war broke out.

READ: Machar becomes South Sudan vice-president and urges unity

Fighting erupted in December 2013 when Kiir accused Machar of plotting a coup, claims he always denied.

Kiir loyalists Kuol Manyang remains as defence minister and David Deng Athorbei as finance minster, who must try to rebuild an economy left in ruins by over two years of war.

The key petroleum portfolio was handed to Dak Duop Bichok.

The foreign ministry goes to Deng Alor, a post he held under a united Sudan, before South Sudan won its independence in 2011.

Alor was a member of a group called the "former detainees", influential leaders arrested when war broke out, but later released after regional pressure.

READ: Kiir releases political detainees to Kenya

Opposition leader and outspoken government critic Lam Akol becomes minister for agriculture and food security, a key job in a country where five million are in need of aid, with some areas having been pushed to the brink of famine.

READ: 40,000 starving to death as South Sudan teeters on famine

Ensuring they work together in a unity government, and that the thousands of rival armed forces now in separate camps inside the capital keep their guns quiet, will be a major challenge.

Both sides remain deeply suspicious, and fighting continues with multiple militia forces unleashed who now pay no heed to either Kiir or Machar.

Tens of thousands of people have been killed and more than two million driven from their homes in the conflict, which has reignited ethnic divisions and been characterised by gross human rights abuses.