Crown Prince Philippe has been sworn in as the new To warm applause, King Philippe, 53, promised to uphold the constitution.
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In his final address before signing a legislative act to step down, 79-year-old King Albert said his country must remain a "source of inspiration" to Europe.
His resignation on the grounds of ill-health came after nearly 20 years on the throne and was timed to coincide with Belgium's national day. He stressed his wish that Belgium - split between the Dutch-speaking north and the French south - remained united.
In a colourful ceremony topped off by trumpet fanfare and cannon-fire, Philippe took his oath in the country's three official languages - Dutch, French and German. This was a reminder of the delicate political task that awaits him - trying to mediate across the divide between French-speaking Wallonia and Dutch-speaking Flanders, where support for independence has been rising fast, says BBC Europe correspondent Chris Morris.
In the abdication ceremony at the royal palace in Brussels, the former monarch told his son: "You have all the emotional and intellectual qualities to serve our country well."
He thanked an audience of some 250 dignitaries and political leaders "for all that you have achieved during my reign".
Ex-king Albert also thanked his wife, Paola, for the support she had given him during his reign, and was in turn thanked by Prime Minister Elio Di Rupo for his service to his country.
Mr Di Rupo holds the political power in the 183-year-old parliamentary democracy.
Albert II then embraced his son and signed the official abdication papers, ending his reign.