He was the candidate of a coalition of opposition parties and had to balance their demands for jobs in appointing his new team.
NEW CABINET
David Mwiraria was appointed as the new finance minister, with the key job of restoring relations with the International Monetary Fund, which were suspended in 2000 over corruption allegations.
Several defectors from the former ruling party, Kanu, were rewarded with plum jobs.
Former Vice President George Saitoti is now in charge of education and implementing Mr Kibaki's campaign pledge of free primary education for all, while Raila Odinga is tasked with cleaning up the ministry of roads, public works and housing.
Charity Ngilu, who ran against Mr Kibaki in the 1997 election, is the new health minister after backing him this time.
Correspondents say that both the ministries of public works and health were hotbeds of corruption under the Kanu government.
Major changes
Kalonzo Musyoka, who defected from former ruling party Kanu just before the elections, is the new foreign minister.
Lawyer and businessman Michael Wamalwa, from the Ford-Kenya party, was named vice president.
Mr Mwiraria told Reuters news agency that his priority was the fight against corruption:
"We have to regularise our relations with donors by putting in place the laws required for good governance."
Mr Kibaki said that he would announce major changes at Kenya's parastatals within the next 10 days.
"Parastatals in Kenya have become a terrible phenomenon," he said.
"They have now reached the point where they are unable to pay their own debts and have become a drain on the treasury."
Definitive results
Earlier, the electoral commission announced the definitive election results, giving Mr Kibaki's National Rainbow Coalition (Narc) a commanding majority in parliament.
Narc has 125 seats in the new parliament, while the party of outgoing President Daniel arap Moi, Kanu, gets only 64 seats.
FINAL RESULTS
It took the commission several days to collect results from all 18,366 polling stations, many of which were in isolated areas.
Mr Kibaki won 62.2% of the vote, with 31.3% going to his main opponent, Kanu's candidate, Uhuru Kenyatta.
In spite of the enthusiasm generated by the polls, which saw the demise of Kanu after nearly 40 years in power, turnout was lower than expected.
Just under 56% of registered voters cast their ballot, compared to 69% in the 1997 election.