Villepin, 51, moves from the interior ministry to replace Jean-Pierre Raffarin, who resigned after voters on Sunday roundly rejected Chirac’s call for the ratification of a European Union constitution.
Villepin arrived at the presidential Elysee Palace just minutes after Chirac bid farewell to Raffarin with a handshake on the palace steps.
A former foreign minister, Villepin gained a worldwide reputation for his impassioned defense of the French stance against a U.S.-led invasion of Iraq.
Villepin is a long-standing Chirac loyalist and was once his top adviser. However, analysts say he is an unpopular choice among lawmakers opposed to a prime minister who has never held elected office.
Chirac and Villepin did not immediately name a new cabinet.
Chirac will address the nation in the evening, his office said. He is expected to lay out a policy “road map” for the new government, which will hope to govern France until presidential and parliamentary elections in 2007.