Dissanayake, 55, who ran as head of the Marxist-leaning National People's Power coalition, defeated opposition leader Sajith Premadasa and 36 other candidates in Saturday's election.
Dissanayake received 5,740,179 votes, followed by Premadasa with 4,530,902.
In a brief speech, the new president pledged to work with others to take on the country's challenges.
"We have deeply understood that we are going to get a challenging country," Dissanayake said. "We don't believe that a government, a single party or an individual would be able to resolve this deep crisis."
Sri Lanka seeks to recover from its worst economic crisis and resulting political upheaval. (AP PHOTO)
Just before the swearing in, Prime Minister Dinesh Gunawardena resigned, clearing the way for the new president to appoint a prime minister and a cabinet.
The election came as the country seeks to recover from its worst economic crisis and resulting political upheaval.
He's the ninth person to hold Sri Lanka's powerful executive presidency, created in 1978 when a new constitution expanded the office's powers.
Dissanayake's coalition is led by the Janatha Vimukthi Peramuna, or People's Liberation Front, a Marxist party that waged two unsuccessful armed insurrections in the 1970s and 1980s to capture power through socialist revolution.
After its defeat, the JVP entered democratic politics in 1994 and has been mostly in opposition since then. However, they have supported several previous presidents and been part of governments briefly.
The NPP also includes groups representing academics, civil society movements, artists, lawyers and students.
Dissanayake was first elected to parliament in 2000 and briefly held the portfolio of agriculture and irrigation minister under then-president Chandrika Kumaratunga. He ran for president for the first time in 2019 and lost to Gotabaya Rajapaksa.
Easing crushing austerity measures was a key election campaign promise of Sri Lanka's new leader. (AP PHOTO)
Dissanayake's first major challenge will be to act on his campaign promise to ease the crushing austerity measures imposed by his predecessor Ranil Wickremesinghe under a relief agreement with the International Monetary Fund.
Wickremesinghe has warned that any move to alter the basics of the agreement could delay the release of a fourth tranche of nearly $US3 billion ($A4.4 billion).
That economic crisis resulted from excessive borrowing to fund projects that did not generate revenue, the impact of the COVID-19 pandemic, and the government's insistence on using scarce foreign reserves to prop up its currency, the rupee.
It led to shortages of essentials such as foods, medicines, cooking gas and fuel in 2022, triggering massive protests that forced then-president Rajapaksa to flee the country and resign.
Wickremesinghe, then prime minister, was elected by parliament to fill the remainder of Rajapaksa's term.
