The election of Ram Chandra Paudel, 78, comes after a split in the communist-dominated ruling coalition headed by Prime Minister Pushpa Kamal Dahal, a former Maoist rebel chief.
Last month, Dahal supported Paudel, a candidate of the opposition Nepali Congress party, over one fielded by his key coalition partner, the Communist Unified Marxist-Leninist (UML) party.
UML has since withdrawn support to the prime minister, requiring him to face a confidence vote this month.
Dahal is expected to cobble together a new coalition with the Nepali Congress party and other smaller groups in the next two weeks, party officials said.
He is already in the midst of another crisis, as the Supreme Court will hear a petition demanding his arrest and an investigation into his leadership during a decade-long civil war that killed thousands of people before it ended in 2006.
State-run Nepal Television said Paudel, a former speaker of parliament, was elected by a majority of 566 members of both houses of parliament and members of seven provincial assemblies, defeating his rival Subas Chandra Nemwang of the UML party.
The president is required to play a largely ceremonial role, though it can play a key function during political crises.
Analysts say the biggest challenge for the new president is to maintain an impartial constitutional role.
“The president is not supposed to independently act, nor be a separate power centre,” constitutional expert Bipin Adhikari said. “In most cases the president is supposed to act on the recommendation and with the consent of the prime minister.”
Paudel, a seasoned politician, replaces Bidhya Devi Bhandari, who retires next week at the end of her five-year term.
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