His unpopular predecessor Naoto Kan, in office just 15 months, and his cabinet resigned in the morning, making way for Noda, the former finance minister, who was elected as premier by the lower house of the Diet.
Noda, 54 -- who on Monday beat four rivals in the ruling centre-left Democratic Party of Japan (DPJ) ballot to become its new president -- is expected to pick his ministerial lineup and party seniors in coming days.
In a display of humility, Noda on Monday stressed that he is an ordinary man without star power or looks and promised a moderate leadership style that seeks to unite the deeply divided party and engage the conservative opposition.
He has said he is open to the idea of a grand coalition with the main opposition group, the Liberal Democratic Party, who were ousted in a landslide two years ago but who can obstruct and block bills in the upper house.
Noda inherits a set of pressing long-term challenges.
As finance minister since June last year, the fiscal conservative has steered the world's third-largest economy as it suffered the blows of the global financial crisis and Japan's March 11 triple calamity.
Faced with terrible public finances, he has promoted raising taxes rather than borrowing to pay for quake and nuclear disaster relief, and to reduce a public debt that has ballooned to twice the size of the economy.