Dmitry Medvedev became Russia's new president and the country's third post-Soviet leader yesterday during a glittering ceremony at the Kremlin which - formally at least - brought down the curtain on Vladimir Putin's eight tumultuous years in power.
Standing next to Putin, Medvedev swore an oath on Russia's constitution. He then delivered an upbeat speech promising to improve the lives of ordinary Russians, fight corruption and end the country's "legal nihilism".
"I believe my most important aims will be to protect civil and economic freedoms," he told guests at the inauguration. He added: "We must fight for a true respect of the law and overcome legal nihilism, which seriously hampers modern development."
Medvedev's first act as president was to nominate Putin as the country's new prime minister. Russia's state duma is expected to confirm Putin in the job later today. Medvedev paid warm tribute to his predecessor. "I would like to thank Vladimir Putin for his personal support, which I have felt constantly," he said.
Yesterday's carefully choreographed ceremony leaves little doubt that Putin and Medvedev are likely to run Russia in tandem, with Putin wielding considerable influence from his new prime ministerial office in Russia's White House.
Putin arrived first at the Kremlin palace. He strolled down a long red carpet in front of 2,400 dignitaries, diplomats, and Russia's patriarch, Alexey II. Medvedev turned up next, a diminutive figure who glanced nervously at his feet as he entered the Kremlin's vast gold Andreyevsky Hall.
Afterwards the men stood side by side in the Kremlin's blustery palace courtyard as a 31-gun salute boomed across the capital. Aged just 42, and the youngest Russian leader for well over a century, Medvedev now faces a formidable series of problems at home and abroad.
Early challenges include tackling Russia's rampant inflation - currently running at at least 12%. He must also manage growing popular dissatisfaction at rapidly rising food and utility prices.
Medvedev has several foreign policy problems in his in-tray. He has to decide what to do about the breakaway region of Abkhazia, where Russia is embroiled in a military standoff with Georgia, and he must also negotiate a new cooperation and partnership agreement with the European Union.
Medvedev's first foreign trip will be to China and Kazakhstan. But one of his early tasks will be to try to establish good relations with the next president of the United States and improve Moscow's fractious relationship with Washington. He also has to ponder Gordon Brown's recent offer of warmer relations with London.
Yesterday experts said that Medvedev's biggest challenge would arguably be to prevent the Kremlin's powerful siloviki - military/intelligence clan - from moving against him. Unlike Putin, Medvedev, a former St Petersburg lawyer, was never in the KGB, whose ex-members dominate the top echelons of Russia's government and bureaucracy.
"He has got enough problems to make his hair go grey," Sam Greene, an expert at the Moscow Carnegie Centre, said.
Asked who Russia's real leader would be, he said: "We have to assume the status quo remains in place, with Putin as the person in the elite whom everyone calls."
He added: "This regime has thrived on flexibility and informal power relations. I've got no reason to think this is going to change in the future. The thing that made Putin different from [former president] Boris Yeltsin is his ability to mediate between different factions within the elite. This isn't something codified in the constitution, and it can't easily be passed to Medvedev."
Political analysts are divided over whether Putin intends to come back as president in 2012 or fade away from politics. Under Russia's constitution Putin, who took over from Yeltsin in 2000, was obliged to step down as president. But there is nothing to stop him returning after a four-year gap.
Yesterday Putin strongly hinted that he had stuck to the law despite calls from hawkish factions inside his administration for him to amend the constitution and serve a third term. "I made a commitment to work openly and honestly, to faithfully serve the people and the state. And I did not violate my promise," he said yesterday.
Medvedev won a sweeping victory in March's presidential election, which many observers believe was rigged and in which some opposition candidates were not allowed to stand.
However, his references yesterday to law and civil rights led some optimists to believe that he may turn out to be more liberal and less authoritarian than his predecessor.
On Tuesday the authorities banned an anti-Kremlin opposition rally in Moscow by supporters of The Other Russia movement, despite the constitution guaranteeing the right to assembly. One man was arrested and bundled into a police van after trying to unfurl a banner.
"Our pensions are now 40 times less than what MPs earn. We have to survive on 4,000 roubles (£86) a month," Zoya Vasilyevna, a 77-year-old retired teacher, complained at the rally. "It was my generation who defended this country in the war, but now these bastards have stolen all the resources."
She added: "Putin only likes billionaires. He's not interested in us."
Another pensioner, Elizabeth Maximonva, added: "Putin and Medvedev are like marionettes in the hands of the siloviki. It doesn't matter which one of them is in charge. If the siloviki don't like what they are doing they'll chuck them out."