His time in office should cement Pakistan's transition back to a strong prime minister and parliamentary democracy after his predecessor reversed amendments made by military rulers.
Hussain was sworn in by Chief Justice Iftikhar Muhammad Chaudhry in a short ceremony after political leaders gathered together for cross-party talks on how to tackle growing insecurity.
Prime Minister Nawaz Sharif and outgoing president Asif Ali Zardari watched as Hussain took oath, wearing a black hat in the style of Pakistan's founding father Muhammad Ali Jinnah.
The 73-year-old Hussain was elected on July 30 by members of the four provincial assemblies and the federal parliament.
A close ally of Sharif, Hussain's low-key persona and lack of personal power will put him in stark contrast to Zardari.
The widower of former prime minister Benazir Bhutto presided over the only civilian government in Pakistan to complete a full term in office and hand over to another at the ballot box.
Zardari's Pakistan People's Party (PPP) suffered a humiliating electoral defeat to the Pakistan Muslim League-N (PML-N) in May when Sharif was elected for a record third term as premier.
Hussain is a former president of the Karachi Chamber of Commerce and was briefly governor of the southern province Sindh until Sharif's second administration was deposed by the military.