Spokesman Barnaba Marial Benjamin confirmed Kiir's announcement Wednesday, saying a Cabinet makeover was long overdue.
South Sudan has struggled to maintain a sense of national security in the two years since it gained independence from Sudan.
Jen Psaki, a spokeswoman for the U.S. State Department, said Washington was "deeply concerned by the risk to stability" posed by Kiir's decision.
The independent Sudan Tribune reported the military was out in droves to protect government installations following the presidential decision.
"The United States calls on all parties to maintain calm and prevent violence, and on the government of South Sudan to quickly and transparently form a new Cabinet," Psaki said in a statement Wednesday.
South Sudan military spokesman Philip Aguer said the situation was normal in the capital Juba.
"There is no insecurity," he said. "Everything is okay."
The U.S. government helped broker the 2005 peace deal ensuring South Sudan's independence. The agreement ended civil war that lasted nearly two decades.
Infighting, border conflicts and disputes with neighboring Sudan over oil revenue have threatened the peace deal for the region.