Before the inauguration, Sarkozy, 52, met with his predecessor Jacques Chirac, who served as the French president for 12 years, in a private room in the palace and received the country's nuclear codes from him.
The right-wing politician is sworn in after scoring a victory in the run-off, with 53% of votes, over the other frontrunner, Socialist Segolene Royal.
Sarkozy, who served as finance and interior minister in Chirac's outgoing government, is an advocate of liberal economic reforms and tough policies on crime and immigration. He opposes further European Union expansion, but is a staunch champion of trans-Atlantic integration. His vision for France's policy regarding Russia is not immediately clear.
In an interview ahead of the May 6 run-off, Sarkozy said, "If you asked me which of the [two] countries France will have closer relations with - the United States or Russia, known to us for its Chechen war -'the U.S.' would be my answer."
Known for his heavy-handed policies on security and migration, Sarkozy suppressed riots in ethnically mixed suburbs in 2005, when he served as interior minister. This made him a hugely unpopular figure with France's immigrant communities, with many feeling they were being treated like second-class citizens.
