Medvedev took the oath of office in an elaborate and lavish ceremony, in the Kremlin's golden-hued St Andrew's Hall, bringing Putin's eight years as President to an end. He placed his hand on a red leather-bound copy of Russian Constitution to take the oath of office. The ceremony was attended by more than 2,400 special invitees and was broadcast live on Russian state television.
After taking the oath of office, Medvedev in his speech said he attached special importance to ''the fundamental role of law.'' ''We must achieve true respect for the law and end the legal nihilism that is seriously hindering modern development,'' he stressed.
He said the development of civil and economic freedoms in Russia would be a priority during his presidency.
''They are of the highest value and define the essence of state activities. The most important task is to further develop civil and economic freedoms and to create new civil opportunities,'' he said.
Earlier, before handing over power to Medvedev at the ceremony, Putin made a brief speech, describing the transfer of power as ''a hugely important stage'' for Russia.
He also urged Medvedev to continue the policies he had been implementing for the last eight years, saying they proved to be ''the correct ones.'' Medvedev, 42, won a landslide victory in the March 2 presidential elections and the inauguration capped his sharp ascendance from obscurity.
While Putin handed over the reigns of power, his central role in the ceremony today reflected the part he has to play in Russia's future.
Political analysts said he will remain a pivotal figure in Medvedev's administration after he assumes his new post of Prime Minister, possibly as early as tomorrow.
He is also set to become the head of the ruling United Russia party.
''The question of who wields the real power in Kremlin will continue to fascinate, puzzle and perplex the political pundits,'' they pointed out.
Unlike Putin, Medvedev has no political base of his own and no links to Russia's ''siloviki,'' representatives of the country's security and defence agencies.