Her appointment, which was proposed by President Viktor Yushchenko, was overwhelmingly endorsed by the parliament in Kiev and was seen as a reward for her success last November in mobilising tens of thousands of disgruntled Ukrainians whose actions helped propel Mr Yushchenko to power.
Three hundred and seventy three MPs (out of a total of 450) supported her nomination, with only the Communist Party voting against her.
Ms Tymoshenko, whose striking good looks, designer clothing and wealth (largely made from the gas industry) have also earned her the titles the "gas princess" and the "orange princess", said the country's 48 million citizens could look forward to a new liberal era. "We don't want, under any circumstances, the state or the government to retain the functions of managing or policing people, the functions of coercion and humiliation" she said.
Ukraine's new government is expected to accelerate attempts to join the EU, Nato and the World Trade Organisation.