Tito Karnavian's promotion to head of the National Counter Terrorism Agency came two months after a suicide bombing and gun attack in Jakarta claimed by the Islamic State (IS) group left four attackers and four civilians dead.
The agency has been strongly criticised for its failure to stop hundreds of Indonesians going to Syria to join IS, and for its inadequate programmes to rehabilitate terror convicts in prison.
One of the Jakarta attackers was an Islamic extremist who had spent years in jail, and police believe Indonesian radicals fighting in Syria may have had a role in planning the attacks along with others currently behind bars back home.
"I am very happy to return to my natural habitat of counter-terrorism," he told reporters as he was inaugurated at the presidential palace in Jakarta.
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He said one of his priorities would be taking on radicals in Poso, a militant hotbed on the central island of Sulawesi where an extremist group has pledged allegiance to IS.
Indonesia, the world's most populous Muslim-majority nation, has suffered several Islamic extremist bomb attacks in the past 15 years, including the 2002 Bali bombings that killed 202 people.