Erdoğan took the oath of office in a ceremony in the Grand National Assembly, the culmination of almost a decade of political activism to transform the country's parliamentary democracy into a presidential system. "We are leaving behind the system that has in the past cost our country a heavy price in political and economic chaos".
Erdogan, who has transformed Turkey in 15 years of rule by allowing Islam a greater role in public life and boosting its worldwide stature, took his oath in parliament for a five-year term after his June election victory.
Erdogan named his son-in-law Berat Albayrak as treasury and finance minister in an updated cabinet that excluded former deputy prime minister Mehmet Simsek, seen as the main market-friendly minister in the previous government. For some, it is the coronation of a new Turkey.
Erdogan has been in power for 15 years, first as prime minister, and then as president, from 2014.
Among 22 heads of state attending will be Venezuelan President Nicolas Maduro, regarded with disdain by Washington but an ally of Erdogan, and Ukrainian President Petro Poroshenko. Erdogan's supporters see the changes as a just reward for a leader who has put Islamic values at the core of public life, championed the pious working classes and overseen years of strong economic growth. The role of prime minister has also been eliminated, and the president will now be able to pick his own Cabinet.
Erdogan, who has transformed Turkey by allowing Islam to play a greater role in public life and boosting the country's global stature, will take his oath nearly two years after defeating a bloody attempted coup.
The News Agency of Nigeria (NAN) reports President Erdogan emerged victor of the June 25 Turkish presidential election with 52.5 per cent of the total votes cast during the exercise. "In other words, Turkey will be an institutionalised autocracy".
It allows him to appoint ministers and vice-presidents and intervene in the legal system. Erdoĝan has repeatedly clashed with strategic allies such as the United States and the European Union in recent years over the war in Syria, Turkey's accession to the EU, human rights abuses by Ankara, Europe's failure to support Turkey during the coup attempt, and rising Islamophobia in Europe.
The new cabinet, due to be announced Monday evening, is expected to have a different look, with pro-government Hurriyet daily columnist Abdulkadir Selvi saying that it was set to "surprise" with figures from outside the ruling Justice and Development Party (AKP).
Erdogan will face immediate and major challenges in his second term, posed by an imbalanced fast-growing economy and foreign policy tensions between the West and Turkey, a North Atlantic Treaty Organisation member.
Earlier on Monday the lira briefly dropped more than 1 percent after a decree removed a clause stipulating a five-year term for the central bank governor.