The change in leadership came after independence hero Xanana Gusmao resigned as prime minister this month, with his party nominating a replacement from the opposition to try to ease the nation's often fraught politics.
The former health minister Rui Araujo, a New Zealand-trained doctor and popular opposition Fretilin figure, will lead just the sixth government since East Timor gained independence in 2002 from Indonesia after a long and bloody struggle against occupation.
"We can do better by working together," Araujo declared in the capital Dili.
The new administration, which will meet for the first time tomorrow morning, has been trimmed from 55 members to 33 in a bid to slash spending and boost efficiency.
Several ministers embroiled in past corruption scandals and others from the old guard have been replaced by fresh faces in what analysts describe as a significant shake-up.
Far from bowing out entirely, Gusmao -- the former guerrilla fighter who served as either president or prime minister since independence -- will remain a minister in the new government.
Araujo paid tribute to his predecessor, who was credited with helping hold Asia's youngest nation together during its fraught early years.
Gusmao led the military wing of East Timor's campaign against Indonesian occupation which began in 1975, and was imprisoned in Jakarta for several years. He returned to his homeland a hero after the Timorese voted for independence in a UN-backed referendum in 1999.
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