Babiš will assume power from the centre-right government of Petr Fiala once the full cabinet is appointed, expected within a week.
Pavel said the appointment "fulfils the will of the voters," noting that the leader of the strongest party is now forming a government.
He also praised Babiš for honouring an agreement to publicly outline how he plans to resolve his conflict of interest related to his ownership of the Agrofert conglomerate.
The president warned, however, that the Czech Republic faces "difficult economic and security conditions" and that upcoming decisions "will not be pleasant for the public," requiring "vision and courage."
Babiš, frequently characterised as a populist by political observers, pledged to fight for "the interests of all citizens" and said he would do everything possible to deliver on the government’s programme.
He declared he wanted the Czech Republic to become "the best place to live on the whole planet."
Following the ceremony, Babiš said he had submitted his list of cabinet nominees to the president.
The list does not include Filip Turek of the coalition partner Motorists, initially considered for foreign affairs and later environment minister, after Pavel opposed his appointment over extremist and racist social-media posts.
Babiš said the environment ministry would go to Motorists leader Petr Macinka, who is also intended to serve as foreign minister.
Polarising political record
Babiš has long been a polarising figure in Czech politics, facing scrutiny over alleged conflicts of interest linked to his business empire, estimated to be worth around EUR 4 billion.
His previous tenure as prime minister was also marked by investigations involving the use of EU subsidies – allegations he has consistently denied.
Babiš, a supporter of US President Donald Trump, has indicated he may scale back Czech military aid to Ukraine.
At 71, he becomes the oldest politician in the country’s history to take office as prime minister.
(ał)
Source: PAP, IAR, Reuters