Mr Li, who already holds the number two spot in the Communist Party, is now in charge of running the world's second-largest economy and it is one of the final steps of a landmark power transition.
He was elected for a five-year term but he is expected to be in office for a decade.
Mr Li, 57, now has the task of steering the country towards more balanced development.
"I announce that comrade Li Keqiang has been chosen as premier of the People's Republic of China," said Yan Junqi, a vice-chairwoman of the National People's Congress (NPC).
Li received 2,940 votes out of 2,949 cast, with three votes against and six abstentions.
On Thursday, Xi Jinping was confirmed as China's new president , completing the transition of power from Hu Jintao.
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