JAKARTA (Reuters) - Indonesia's president has removed the country's chief police detective days after picking a graft campaigner as his chief of staff, dispelling critics'perception of a reluctance to protect the national corruption agency against vested interests.

A long-standing rivalry between Indonesia's police and its popular anti-graft agency boiled over this year after the agency named President Joko Widodo's previous choice to be police chief as a suspect in a bribery case.

Friday's announcement of three-star police general Budi Waseso's transfer to head the narcotics agency won praise from activists who accused him of being behind efforts to weaken the anti-corruption agency.

"It's confirmed that (Waseso) has been named the head of the narcotics agency," a police spokesman, Anton Charliyan, said in a text message.

The police are perceived to be among Indonesia's most corrupt institutions, says watchdog Transparency International, whose corruption perceptions index ranks the nation below China and Niger.

In the police dispute with the anti-graft investigators, Waseso had been seen to lead the charge against the agency, having arrested its chief, a commissioner, and a key investigator on various charges.

"Waseso's replacement marks a new era for the anti-corruption movement in Indonesia," said Adnan Topan of a non-government body, Indonesia Corruption Watch.

"It also is a new opportunity for the police to improve quality of law enforcement and to regain public trust," he added.