New Prime Minister Chris Hipkins, 44, was sworn in by New Zealand’s governor-general during a ceremony in the capital, Wellington.
“This is the biggest privilege and responsibility of my life,” Hipkins said after formally taking office.
“I’m energized and excited by the challenges ahead.”
Ardern said last week she no longer had “enough in the tank” after steering the country through natural disasters, its worst-ever terror attack and the Covid-19 pandemic.
She made her last public appearance as prime minister earlier on Wednesday, walking out of the distinctive Beehive parliament building as hundreds of onlookers broke into a spontaneous round of applause.
Prince William was among the first to congratulate Ardern, who became a global figurehead of progressive politics during her five years in charge.
“Thank you Jacinda Ardern for your friendship, leadership and support over the years, not least at the time of my grandmother’s death,” he wrote on his official Twitter account.
Folk singer Yusuf “Cat” Stevens, who played a concert in memory of the 51 people killed during the 2019 Christ church mosque massacre, also praised Ardern.
He said on Twitter that Ardern “kept New Zealanders together following the terror attack in Christchurch”.
Ardern was first elected as prime minister in 2017, before riding a wave of “Jacindamania” to secure a second term with a landslide victory in 2020.
But her centre-left government has increasingly struggled over the past two years, hampered by soaring inflation, a looming recession and a resurgent conservative opposition.
Hipkins, the architect of New Zealand’s pandemic response, is now tasked with reviving the government’s sagging popularity ahead of a general election in October.
The father-of-two is nicknamed “Chippy” and describes himself as a “regular, ordinary Kiwi” from a working-class background who loves sausage rolls and cycling to work.
“Covid-19 and the global pandemic created a health crisis. Now it’s created an economic one and that’s where my government’s focus will be,” Hipkins has said previously.
Hipkins has also condemned the “utterly abhorrent” social media abuse levelled at Ardern, which intensified during her years as prime minister.
But Ardern on Tuesday said she would “hate” for her departure to be seen as “a negative commentary on New Zealand”.
“I leave feeling gratitude for having this wonderful role for so many years,” she said.
Ardern will continue to sit in parliament but has announced her intention to step back from the cut and thrust of daily politics.
She has also said she plans to get married to her partner Clarke Gayford, a television personality who fronts a popular fishing show, and is looking forward to taking her daughter Neve to school.