KP Oli, as he is popularly known, succeeds the Nepali Congress Party's Sher Bahadur Deuba, who resigned almost two months after an alliance of communist parties swept the parliamentary and provincial elections.
The veteran Nepalese politician became Nepal's prime minister for the fourth time in May a year ago after the main opposition party made a decision to end the obstruction of parliament.
President Bidya Devi Bhandari administered the oath of office at Sheetal Niwas at 4:30pm on Thursday in the capital, Kathmandu, hours after she appointed Oli to the post.
The final Cabinet Meeting of the incumbent government is now underway at the Prime Minister's official residence in Baluwatar.
Sher Bahadur Deuba had earlier resigned as prime minister in a televised address after just eight months in office.
His government is credited with holding successful elections following the announcement of the new constitution in 2015.
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Bajwa said collaborative approach and persistence is the answer to all challenges, for which Pakistan is ready to play its part. The two-day talks, however, ended without any breakthrough and the two sides did not issue a customary joint statement.
An alliance of two major communist parties is expected to take over power when the new parliament is seated.
It had also secured an overwhelming majority in the upper house of Parliament with 39 seats, paving the way for the leftist alliance to form the country's next government.
It must be noted that the Deuba-led Nepali Congress (NC) stood third in the historic parliamentary and provincial assembly polls.
He had also served as Minister of Home Affairs in 1994ï¿½??1995. The left alliance partner CPN (Maoist Center) will prop up his claim.
This is published unedited from the PTI feed.