Angela Merkel has been confirmed as German chancellor for a third term, at the head of a grand coalition, by a vote in parliament.
Her centre-right CDU/CSU bloc fell short of an overall majority in September’s polls and will share power with the Social Democrats (SDP).
Merkel received 462 votes out of 621 in the Bundestag (parliament) on Tuesday.
The SPD’s membership voted on Sunday to back the coalition with its old rival.
For the SPD, party chairman Sigmar Gabriel will become economy minister and deputy chancellor, while Frank-Walter Steinmeier will be foreign minister.
A national minimum wage will be brought in but Germany’s tough stance on fiscal discipline is unlikely to change.
Under the coalition deal signed last month, a minimum hourly rate of 8.50 euros (£7.11; $11.55) will come into force for the first time in 2015.
The talks to forge the new coalition were the longest for any German government since since World War 2.
The CDU/CSU and SPD finally signed the deal, a 185-page agreement entitled “Shaping Germany’s Future”, late last month.
As the EU’s most industrialised and populous state, with its biggest economy, Germany dominates decision-making for the eurozone.