A presidential spokesperson told Al Jazeera that the decision to reassign Mahmoud was in direct response to the demands of the Egyptian people.
He also said that a fact-finding commission set up by President Morsi earlier in the year would shortly be releasing "more facts and new evidence" that would lead to new cases against additional defendants and retrials.
Protests in Cairo
Earlier on Thursday, hundreds of protesters demonstrated in Cairo against the acquittal of the Mubarak-era officials.
The protesters chanted slogans against the verdict, accusing the judges of "complicity" with the leaders of the former regime. "The people want to purify justice," they shouted.
The Youth Movement of April 6, which were the first to protest against Mubarak and the Muslim Brotherhood, had called for demonstrations on Thursday and Friday, demanding that the accused in this case be "retried."
Various political parties and groups also have called for demonstrations on Friday against the country's Constituent Assembly, to demand that a more representative body be formed and justice be done for protesters killed or tortured last year.