Field Marshal Mohammed Hussein Tantawi, the former military chief, was awarded the Medal of the Order of the Nile, Egypt's highest honor. Tantawi's deputy and army chief of staff, Lt. Gen. Sami Anan, was awarded the Medal of the Order of the Republic.
The New York Times reported Tantawi and Anan -- who were publicly forced into early retirement Sunday -- will serve as presidential advisers.
The move was seen as an attempt to bring an end to tensions between Morsi and the Supreme Council of the Armed Forces, the interim ruling body following the ouster of former President Hosni Mubarak. The decision to bestow military honors suggests Tantawi and Anan will not face criminal prosecution for actions during the revolution, the Times said.
Lt. Gen. Abdel Fattah al-Sissi, former head of military intelligence and Council member was appointment Tantawi's replacement. Maj. Gen. Mohammed al-Assar, another Council member, was appointed to replace Anan.