The new premier, Ranil Wickremesinghe, has already served in the office five times -- but it remains to be seen whether he will be able to get any legislation through parliament.
The 73-year-old will be tasked with navigating Sri Lanka through the worst downturn in its history as an independent nation, with months of shortages and blackouts inflaming public anger.
"We want to return the nation to a position where our people will once again have three meals a day," Wickremesinghe said after his appointment.
"Our youth must have a future."
In a bid to win over opposition lawmakers demanding he quit, president Gotabaya Rajapaksa, 72, had pledged to give up most of his executive powers and pave the way for a new cabinet.
Mahinda Rajapaksa, the president's brother, resigned as prime minister on Monday after his supporters attacked anti-government demonstrators who had been protesting peacefully for weeks.