Ahmed took the oath at the presidential palace here in front of outgoing Prime Minister Khaleda Zia, diplomats, dignitaries and government officials.
"I, Professor Iajuddin Ahmed, am respectfully taking oath ... as the chief advisor of the neutral caretaker government," the president said as he was sworn in by the country's Supreme Court chief justice J.R. Mudassir.
"I will dutifully and faithfully act as the chief advisor," he said.
The 10-minute ceremony was boycotted by the main opposition Awami League, whose objection to the government's former plan to install former Supreme Court justice K.M. Hasan in the post.
The opposition accused Hasan, a former BNP official, of being partisan and unable to ensure free and fair elections. He resigned on Saturday.
At least 18 people have died in clashes over the past three days involving opposition supporters opposed to Hasan's appointment, police and ruling party activists.
Last-ditch talks to find a compromise candidate stalled earlier Sunday.
The five-year term of Zia's government ran out on Friday. The four-party coalition led by her Bangladesh Nationalist Party (BNP) has held power since 2001.
The caretaker government system aims to prevent ruling parties from rigging polls by appointing a neutral, non-party administration to over see them.

Copyright AFP (Agence France-Presse), 2006