"This is a tremendous opportunity. I have been involved in the political process for basically my whole life," Chagger was quoted as saying, after her swearing-in ceremony at Rideau Hall in Ottawa, by cbc.ca on Friday.
Chagger, 36, replaces House leader Dominic LeBlanc.
"I know what democracy should look like. Democracy should be engaging Canadians. That is the leadership of our Prime Minister," Chagger added.
Canadian Prime Minister Justin Trudeau expressed his confidence that Chagger will be "a worthy successor."
Chagger, who is a rookie MP and is one of the four Sikhs -- Harjit Sajjan, Navdeep Bains, Amarjeet Sohi being the other three -- was elected to Trudeau's cabinet in 2015,in a move that drew worldwide attention.
Chagger had a brief and unremarkable stint as small business and tourism minister.
She will retain that portfolio in addition to her new position.
Chagger was born and raised in the Waterloo region, attending the University of Waterloo where she was the president of the Young Liberals.
After graduating with a Bachelor of Science she worked as an assistant to former Kitchener-Waterloo MP Andrew Telegdi for four years before becoming a community organiser in 2009.
Chagger also worked as a volunteer on Trudeau's leadership campaign in 2013.
