Sheikh Hamad bin Khalifa Al Thani, the ruler of Qatar for 18 years, has transferred the "reins of power" to his son.
The outgoing emir made the announcement to hand over power to Sheikh Tamim bin Hamad Al Thani, 33, in an address to the nation on Tuesday .
"I declare that I will hand over the reins of power to Sheikh Tamim bin Hamad Al Thani, and I am fully certain that he is up to the responsibility, deserving the confidence, capable of shouldering the responsibility and fulfilling the mission," Sheikh Hamad, 61, said.
Live television footage after the speech finished showed Sheikh Hamad and his son smiling widely, being greeted with traditional embraces by dignitaries and prominent members of the Qatari society.
|Abdullah al-Athbah, editor of al-Arab newspaper, explains the handover process
Sheikh Hamad had met royals a day earlier, where he announced the transition plans after weeks of speculation of his abdication.
"God Almighty is aware that I had not desired power for the sake of power, nor endeavoured to rule for personal motives," the outgoing emir said. "It has always been the nation’s interest ... that we lead through a new chapter."
Sheikh Tamim has been groomed for the position since 2003, when his elder brother stepped aside.
In the speech, Sheikh Hamad also called on the people of Qatar to protect their identity.
"I am confidant that you are fully aware of your loyalty and of your Arab and Muslim identity," he said. "I urge you to preserve our civilised traditional and cultural values, originating from our religion, Arab identity and above all our humanity; as we believe that the Arab World is one human body; one coherent structure; it prospers if all its parts are prosperous."
Saudi Arabia was quick to offer congratulations to Sheikh Tamim, who is expected to address the Shura Council, an advisory assembly, on Wednesday in Doha.
The kingdom's 90-year-old King Abdullah said: "We are confident that you will continue the journey of your father ... and his efforts in serving the state of Qatar and its brotherly people as well as strengthening relations between the two nations."
The UAE followed, with President Sheikh Khalifa bin Zayed al-Nahayan, 65, affirming the "deepness of the brotherly relations," in a statement carried by state media.
British Foreign Secretary William Hague thanked Sheikh Hamad for friendship and support, and tweeted that Tuesday symbolised an "Historic day for Qatar as the new generation takes over."
Al Jazeera's diplomatic editor, James Bays, said the next 48 hours would be crucial for the new leader.
"The way this works is that he needs to see his subjects," he said. "He needs to speak to prominent players in society, and there will effectively be, for some hours today, and some hours on Wednesday, an open house here where he will be meeting all the prominent sheikhs, speaking to them, discussing the future."
Sheikh Hamad took power in 1995 while his father was on an overseas trip.
Since then Qatar's economy has grown significantly.
That growth came largely from natural gas; Qatar possesses some of the largest proven reserves in the world, but produced almost nothing before 1995.
He became the ruler of a country with an $8bn economy, a figure which grew to $174bn a decade and half later.
During most of Sheikh Hamad's rule, Qatar also adopted a pragmatic policy, cultivating relationships with countries and groups across the political spectrum.
"We also know when you speak to diplomats here that [Sheikh Tamim] has been involved very closely with Qatari policy, both domestic and foreign policy for some considerable time," Al Jazeera's Bays said. "Slowly he's been taking more and more of a share of the running of this country.
It's not as though he is now going to be sitting at a new desk with a new brief. He has been taking control of many matters, both in terms of their domestic and international policy."