0235 GMT February 21, 2019
A stalwart of the ruling Communist Party, Diaz-Canel was sworn in to replace Raul Castro by the National Assembly in a carefully managed new chapter for the Caribbean island, aimed at preserving the political system, Reuters reported
"The mandate given by the people to this house is to give continuity to the Cuban revolution in a crucial historic moment," Diaz-Canel, 57, told the assembly in his first speech as president.
He delivered a warm homage to 86-year-old Raul Castro, who took office a decade ago as his brother Fidel Castro's health deteriorated. Fidel Castro died in 2016.
Castro will retain considerable clout as the head of the Communist Party until a congress in 2021. Diaz-Canel, praising the reforms he ushered in as president, said Castro would remain the leader of the revolution and would be involved in major decisions.
Stepping to the podium for a 90-minute-long parting speech, a relaxed-looking Castro gave the impression he would not quickly fade from sight. He sharply criticized US foreign, trade and immigration policy under President Donald Trump.
"Since the current president arrived in office, there has been a deliberate reversal in the relations between Cuba and the United States, and an aggressive and threatening tone prevails," Castro said.
Thursday's session was held on the 57th anniversary of Cuba's 1961 defeat of a CIA-backed Cuban exile invasion at the Bay of Pigs, a victory that Havana celebrates as a symbol of its resistance to "imperialist" pressure for change from Washington.
In 2014, Castro and former US President Barack Obama reached a landmark agreement to renew diplomatic ties and improve relations between the Cold War foes, a detente that led to a rapid increase in US visits and investment on the island.
There has been a renewed chill under Trump, who put a stop to doing business with some Cuban state-run companies and tightened rules for US visitors. A spate of mystery illnesses among US diplomats in Havana has also undermined trust.
Despite that, Diaz-Canel praised Castro's move to renew relations with the United States. He said there would be no compromise in Cuba's foreign policy but in a repetition of a long-held stance by Havana, he said he would hold dialogue with anybody who treated Cuba as an equal.
In Washington, a White House official said the Trump administration had no expectations Cuban people would have any greater freedoms under the new "hand-picked" leader, and had no intention of softening its policy toward the island's government.
Castro spoke highly of Diaz-Canel and gave his blessing to the younger man to take over from him as the powerful head of the Communist Party in three years. He also said the new president could serve two five-year terms, underscoring restrictions Castro imposed on himself after his brother's decades in power.