Khan, the son of a Pakistani bus driver, beat Conservative Zac Goldsmith with 57 per cent votes -- the largest mandate of any British politician in history -- marking the return of Labour rule to the UK capital after eight years.
Khan was officially sworn-in as the new mayor of London at a multi-faith ceremony in Southwark Cathedral here.
"Good morning. My name is Sadiq Khan and I'm the mayor of London. I will be a mayor for all Londoners," he said, before signing his declaration of office.
The 45-year-old is the third person to become the elected mayor of London, after fellow Labour politician Ken Livingstone and Conservative Boris Johnson.
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In his victory speech last night at City Hall, his new office, Khan described London as the "greatest city in the world" and said he had never imagined that "someone like me could be elected as mayor of London".
"The opportunities, not just to survive but to thrive," he said.
Making a direct reference to the divisive campaign run by Goldsmith's team, which has been criticised for its attempts to link Khan with extremist personalities, he said, "This election was not without controversy and I am so proud that London has today chosen hope over fear and unity over division."
Khan received 57 per cent of the total votes in the so-called 'Super Thursday' elections , compared to Goldsmith's 994,614, after the capital had its largest ever voting turnout at 45.6 per cent.
Though it appeared mathematically impossible that
Goldsmith could catch him on second-preference votes, but the count had to officially go into second preference votes to cover the 50 per cent vote share mark required for a clear victory.
The new mayor, who succeeds Boris Johnson, has control over four major policy areas in London-- transport, policing, environment, and housing and planning -- under the London Assembly's scrutiny.
Scotland Yard Commissioner Sir Bernard Hogan-Howe said,"I look forward to working with him, and all London's new and re-elected Assembly members, to continue transforming the Met (Metropolitan Police) to keep London one of the safest capitals in the world."
Outgoing mayor Boris Johnson said, "Many congratulations to Sadiq on securing a huge mandate to do the best job in British politics. I wish him every possible success."
Khanis a former human rights lawyer and an MP from Tooting, east London, since 2005.
A prominent figure in former Labour Prime Minister Gordon Brown's Cabinet,he had resigned from the shadow Cabinet last year to launch his campaign to replace Johnson -- whose second and final term as London mayor came to an end today.
Khan relied mainly on his solid working class roots and upbringing on a London council housing estate as strong credentials against Goldsmith's more privileged background.
Jemima, former wife of Pakistani cricketer-turned- politician Imran Khan, tweeted as the results became clear: "Sad that Zac's campaign did not reflect who I know him to be -- an eco friendly, independent-minded politician with integrity."
Khan's personal triumph comes as a major boost for the Labour party, which had a rather poor showing in the overall polls, being relegated to third place in Scotland and just about holding on to its local council seats in London.