Gordon Brown has become the UK's prime minister, succeeding Tony Blair.
Posing outside 10 Downing Street with his wife Sarah, the man who has been Mr Blair's chancellor since 1997 said: "Let the work of change begin."
He said his priorities were education, health and restoring trust in politics and promised to "try my utmost".
Mr Blair has stood down as MP for Sedgefield after 24 years to become a Middle East peace envoy. A Cabinet reshuffle is expected on Thursday.
Long-time ally Alistair Darling is tipped to replace Mr Brown as chancellor.
BBC political editor Nick Robinson said it was likely that Environment Secretary David Miliband would be promoted to foreign secretary.
Before entering 10 Downing Street, Mr Brown said: "This will be a new government with new priorities. And I have been privileged to have been granted the great opportunity to serve my country.
"And at all times I will be strong in purpose, steadfast in will, resolute in action in the service of what matters to the British people, meeting the concerns and aspirations of our whole country."
Mr Brown promised to lead a government of "all the talents" and said his "mission" was to provide "the best of chances for everyone".
HOW THE DAY UNFOLDED
1200 - 1230: Final PMQs
1300: Blair says farewell to staff at No 10
1312: Blair arrives at Palace, where he tenders resignation in private audience with Queen
1330: Brown departs Treasury with wife Sarah
1340: Blair leaves Palace
1351: Brown arrives at Palace where Queen asks him to form a government
1448: Brown leaves Palace
1455: Brown enters No 10 for first time as prime minister
"If we can fulfil the potential and realise the talents of all our people then I'm absolutely sure that Britain can be the great global success story of this century," he told reporters in Downing Street.
Then, quoting his school motto, he said: "I will try my utmost. This is my promise to all of the people of Britain. And now let the work of change begin."
Mr Brown is thought likely to carry out the bulk of his Cabinet reshuffle on Thursday, but it has already emerged that Margaret Beckett is leaving her post of foreign secretary.
Ms Hewitt, who has elderly parents in Australia, said she was quitting the government for "personal reasons".
Baroness Amos, leader of the House of Lords, is leaving the Cabinet, the BBC has learned.
Conservative leader David Cameron congratulated Mr Brown on becoming prime minister, but demanded he hold an immediate general election.
He said: "Gordon Brown doesn't have the mandate, he wasn't elected as prime minister, and he should go to the country."
Mr Brown spent 57 minutes inside Buckingham Palace in a private audience with the Queen - more than double Mr Blair's 28 minutes.
Mr Brown, 56, becomes the 11th prime minister of the Queen's reign.
He became Labour leader unopposed on Sunday after potential rivals had failed to gain enough support to mount a challenge.
Earlier, Mr Blair was earlier given an emotional standing ovation by MPs.
He admitted he had "never pretended to be a great House of Commons man" but he paid tribute to the "noble" work of MPs and - in his final words to Parliament - said: "I wish everyone, friend or foe, well and that is that, the end."
Mr Blair travelled by train to Sedgefield, in the north-east of England, where he said farewell to local party members after 24 years as their MP.
He will take up a new job as a peace envoy for the "quartet" of the UN, America, EU and Russia.
Tony Blair travelled by train from London King's Cross to Darlington
As they left Downing Street the Blair family - including their four children - posed for the media.
Mr Blair said nothing as they got in the car, but wife Cherie smiled and waved at the press and said she would not "miss" them.
Conservative leader David Cameron hailed Mr Blair's "remarkable achievement" in being prime minister for 10 years, praising peace in Northern Ireland and Mr Blair's work in the developing world which he said will "endure".
He wished him "every success for whatever he does in the future".
Mr Blair thanked Mr Cameron for his tributes and said although he could not wish the Tory leader well politically, "personally I wish both him and his family very well indeed".
Liberal Democrat leader Sir Menzies Campbell said that, despite their political disagreements, Mr Blair had been "unfailingly courteous" and extended his party's best wishes to the outgoing prime minister and his family.