Toyoda formally became president at a directors' meeting later in the day, the company said in a statement.
Akio Toyoda is the grandson of Kiichiro Toyoda , who founded the company, and the son of Shoichiro Toyoda, a former president.
The only bright spot in Toyota's performance lately has been the popularity of the third-generation Prius hybrid, partly due to government incentives on green vehicles.
However, Toyoda clearly faces an enormous challenge to turn around the company that his grandfather founded more than 60 years ago.
It forecasts a net loss of $5.8bn for the year up to March 2010.
In a news conference in January when his appointment was first announced, Toyoda had promised a back-to-basics approach at Toyota, valuing rank-and-file and consumer needs.