De Villepin, 51, is best known for his eloquent defence of the French stance against a US-led invasion of Iraq.
Raffarin arrived at the presidential Elysee Palace on Tuesday morning, where he presented his resignation.
Raffarin's resignation came after French voters dealt the government a punishing blow by rejecting the European Union's proposed constitution.
Raffarin, in office since May 2002, has made enemies by pushing through a series of difficult reforms to France's social programmes, including pensions, and failing to chip away at unemployment, now at 10%.
As French Foreign Minister, De Villepin's determined resistance to the war stirred French pride but frustrated and angered France's key Cold War ally, the United States. He stood by France's view of a "multi-polar" world that is not dominated by one superpower.
Raffarin (L) handed in his
resignation to Chirac
"This message comes to you today from an old country...that does not forget and knows everything it owes to the freedom fighters who came from America and elsewhere - and yet has never ceased to stand upright in the face of history and before mankind," de Villepin told the UN in February 2003.
"Faithful to its values, it believes in our ability to build together a better world."
US-French relations scarred by Iraq are only now starting to come out of the deep freeze.
On Tuesday evening, Chirac addressed the French people in a televised address and said the "no" vote to the European constitution was "not the rejection of the European ideal".
Chirac said the no vote was not a
rejection of European ideals
Instead, the French leader said, the outcome of Sunday's referendum was a demand for action and results, explaining his decision to appoint a new prime minister earlier in the day.
"You are calling for determined, immediate action to respond as soon as possible to the present difficulties, which are unemployment and spending power," said Chirac, in a tacit acknowledgment of widespread dissatisfaction with his economic policies.
In the referendum, Chirac said, "strong, diverse - and at times, contradictory - expectations were expressed, and they come together in a feeling of dissatisfaction and insecurity in today's world".
Chirac blended a pep-talk delivery with acknowledgment that many French are angry.
He said preserving France's way of life hinges on staying part of Europe and holding true to a "French model" based on economic dynamism, solidarity and labour dialogue.
It "is not an Anglo-Saxon type model, nor is it a model synonymous with 'immobility'," he said.
Sunday's referendum on an EU constitution was a humiliating blow to Chirac and a disavowal of his government, left reeling by the decisive victory of those rejecting the constitution - some 55%.
It also was a huge blow to the European Union. The constitution must be approved by all 25 EU members in order to come into effect. Polls, analysts and voters confirmed that some people voted "no" to the constitution to punish a government they feel has failed them.