Mulatu Teshome has been elected for a six-year presidential term in a largely symbolic and ceremonial post.
"Following the opening of the new Parliament, a joint session of the House of Representatives and House of Federation elected ambassador Dr Mulatu Teshome as the president of Ethiopia," the foreign ministry said.
While officially head of state, real power rests in the hands of the Prime Minister Hailemariam Desalegn.
Mulatu (57), who was Ethiopia's ambassador to Turkey until his appointment, replaces 88-year old Girma Wolde-Giorgis, who first took the post in 2001 and was re-elected in 2007.
"I feel honoured to be the fourth president of the Federal Democratic Republic of Ethiopia," Mulatu said after taking the oath of office, and vowing to fulfil "the country's development strategies".
Mulatu, who is often referred to by his first name, has also served as Ethiopia's ambassador to China and Japan as well as Ethiopia's minister of agriculture.
Ethiopia's Parliament is dominated by the ruling party, with only one opposition member.
Prime Minister Hailemariam Desalegn himself took office in September 2012, a month after the death of long-time ruler Meles Zenawi. – Sapa-AFP