The 73-year-old former special forces commander won the February 14 contest with nearly 60 per cent of the vote and has spent the past nine months building a formidable parliamentary coalition.
Prabowo, wearing a traditional black hat and navy suit with a woven maroon and golden sarong, officially become Indonesia's eighth president on Sunday after he was sworn in during a ceremony at Indonesia's parliament.
Prabowo, who unsuccessfully ran for the presidency twice before, was expected to give a speech to lawmakers at the parliament's upper house later on Sunday before heading to the presidential palace.
He was joined in the swearing-in ceremony by his running mate, Gibran Rakabuming Raka, 37, the eldest son of outgoing President Joko "Jokowi" Widodo.
Outgoing president Joko Widodo attended the inauguration of Prabowo in Jakarta. (EPA PHOTO)
Flower boards set up outside the palace either congratulated Prabowo and Gibran or thanked Jokowi for his decade as president.
Jokowi supporters are also attending the celebrations to bid farewell to Indonesia's outgoing leader.
Anneta Yuniar, a bystander who had excitedly waved at Jokowi's motorcade as it slowly made its way past supporters before the ceremony, said she would miss Jokowi but that Prabowo was a strong leader.
"Prabowo will continue the development that Jokowi started. There's continuity. It's what I want," she said.
After two terms and a decade in power, Jokowi has left an indelible mark on the nation of 280 million, presiding over a period of strong economic growth and massive infrastructure development.
Critics also say, though, his rule has been marked by a rise in old-time patronage and dynastic politics, and they warn about diminished integrity in courts and other state institutions.
Supporters lined the streets in Jakarta to cheer Prabowo en route to his inauguration ceremony. (EPA PHOTO)
Prabowo is expected to meet with foreign dignitaries, including about 20 heads of state, later on Sunday at the presidential palace, said Hasan Nasbi, the head of the presidential communications organisation.
China said it is sending Vice President Han Zheng to the inauguration. The delegation from the United States is being led by US Ambassador to the UN Linda Thomas-Greenfield.
During his campaign, Prabowo billed himself to voters and investors alike as the "continuity candidate".
He has set a target to accelerate economic growth to eight per cent from a current rate of five per cent, pledged to make Indonesia self-sufficient in production of staples, and signalled a more active role on the global stage.
Past allegations against Prabowo of involvement in the kidnapping of student activists and human rights abuses in Papua and East Timor, however, have also raised concern about Indonesia's trajectory of democracy, human rights advocates say.
Prabowo has always denied the allegations that led to his dismissal from the military in 1998, the same year Indonesia broke free from the decades-long authoritarian rule of former president Suharto.
