All of his allies in the no-confidence motion have stressed, however, that their vote against Mr Rajoy was not a blank cheque for Mr Sanchez. On Friday, he became the first leader in Spain's modern democracy to lose a no-trust vote in Parliament.
The no-confidence vote came after 29 former members of Mr Rajoy's conservative Popular Party were convicted of corruption last week.
BARCELONA, Spain New Spanish Prime Minister Pedro Sanchez had been barely sworn in Saturday before one of the country's most critical issues facing his fragile government was pressed upon him: ending the Catalan secession crisis.
He has also said he wants to "build bridges" with Catalonia's new separatist government, headed by Quim Torra, which will take office on Saturday at the same time that Sanchez takes his oath of office.
Mr Rajoy attended the swearing in ceremony, which was held in the Palace of Zarzuela in Madrid.
But while Mr Sanchez's appointment could have implications for Catalonia, it is unlikely to rock the status quo in Europe as the new leader of the eurozone's fourth biggest economy is a staunch supporter of the European Union and the shared currency.More news: Donald Trump wants to ban luxury German cars
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Sanchez has vowed to fight corruption and help those Spaniards affected by years of public spending cuts under Rajoy's government.
Besides inheriting Spain's worst political crisis in almost four decades, Sanchez's government will depend on the support of the far-left Podemos (We Can) party and of a motley crew of regional parties and Catalan secessionists to get anything done in the federal government.
He also pledged to hold an election soon although did not set a date.
The Socialist (PSOE) leader has promised to respect the 2018 state budget passed by his predecessor and negotiate with the Catalans, so long as the unity of Spain is not up for question.
"Our "Yes" to Sanchez is a "No" to Rajoy", is how Mr Joan Tarda of the Catalan pro-independence party Esquerra Republicana de Catalunya put it in Parliament.
The forming of a Catalan government will automatically end the extraordinary takeover by Spain's central powers of the region as part of its crackdown following a failed declaration of independence by Catalonia in October.