Senate Speaker Isabel Allende, daughter of former President Salvador Allende, placed the red, white and blue presidential sash on Bachelet's shoulder amid thunderous applause Tuesday during the inauguration ceremony at Chile's congress in the port city of Valparaiso.

After taking the oath of office, Bachelet vowed to push major social change in Chile, which has struggled with economic slowdown and student-led protests in recent years.

"It's time to take this road that we committed to through our government program; it's time to kick start these dreams toward a nation that is more just, developed, modern, tolerant and inclusive," she later told a crowd of around 5,000 people outside the presidential palace in Santiago.

Social reforms

Bachelet campaigned to finance education reform through higher corporate taxes, improve healthcare, make the country's dictatorship-era constitution more representative and reduce an enormous wealth gap.

"Chile has but one great enemy, and its name is inequality. Only together can we take it on," she said. "Let's start now. The time is short."

Bachelet is the daughter of an air force general who remained loyal to Salvador Allende in the 1973 coup that established the Augusto Pinochet military dictatorship. She was tortured while in detention before she fled the country and returned years later to work as a pediatrician before entering politics. Her father Alberto died after being tortured by the 1973-90 Pinochet regime for remaining loyal to Allende, who died on the day of the coup while facing capture.

The 62-year-old Bachelet became Chile's first female head of state during her first term in office from 2006-10. She was lauded for guiding the country through the global economic crisis and using government funds to aid the poor, but struggled to boost growth and curb unemployment. She enjoyed 84 percent approval when she left office.

Leaving office is Sebastian Pinera, who said he was handing his successor "a better country than the one we had four years ago." Like Bachelet before him, Pinera is constitutionally barred from seeking a second consecutive term.

Uniting Chile

Bachelet has promised to provide free university-level education and stop state subsidies to private higher learning institutions – two issues central to the student protests that began in 2011. Student leaders have nonetheless remained skeptical and said the protests will continue.

Bachelet's "New Majority" coalition, which includes Communists, street activists and former student leaders, rolled to victory in December by the widest margins in eight decades of presidential elections.

Although she has the majority needed to push through certain measures like tax reforms, she must still form alliances with opposition and independent factions to pass education and constitutional overhauls.

dr/jm (AFP, AP, Reuters, dpa)