Observers say the move underlines Kim's lack of confidence in overcoming the country's desperate crisis. Over the weekend, the parliament of the world's last Stalinist state re-elected Kim, the son of late "Great Leader" President Kim Il Sung, the chairman of the enhanced National Defence Commission.
However, it then abolished the post of president, having declared the late Kim North Korea's "eternal president". Instead it called the post of Chairman of the National Defence Commission "the highest post of the state". The Korean Central News Agency in Pyongyang said the newly amended constitution granted the Chairman the right to declare war and mobilise soldiers.
"Kim still lacks confidence in overcoming the current crisis and prefers to remain behind the scenes. He still needs his father's charisma," said Park Hun-ok, of the Institute of North Korea Studies in Seoul.
Kim faces a daunting task. North Korea, which insists self-reliance is the central plank of its political ideology, has been forced to seek international handouts after three years of floods and droughts caused widespread food shortages.
Observers believe Kim Jong Il will be able to deflect some of the blame for failures on to Kim Yong Nam, the former foreign minister, who was appointed president of the Supreme People's Assembly, the North Korean parliament .
Kim Jong Il had been widely expected to take the presidency, the last of the three titles that his father had held until he died in 1994. The younger Kim was named supreme military commander in 1991 and communist party secretary last October.
Since his death, Kim Il Sung has remained the head of state and diplomatic documents have been issued in his name, allowing Kim Jong Il to avoid meeting diplomats or hosting receptions.