In another sign that major change was not afoot, Raul Castro, 76, proposed he would consult with the ailing, 81-year-old Fidel on all major decisions of state, and parliament approved the proposal.
The vote came five days after Fidel said he was retiring, capping a career in which he frustrated efforts by 10 U.S. presidents to oust him.
The U.S. has said the change from one Castro to another would not be significant, calling it a "transfer of authority and power from dictator to dictator light."
Secretary of State Condoleezza Rice said Sunday Cubans have a right "to choose their leaders in democratic elections" and urged the government "to begin a process of peaceful, democratic change by releasing all political prisoners, respecting human rights, and creating a clear pathway towards free and fair elections."
Her statement, issued shortly before parliament met, called the developments a "significant moment in Cuba's history."
Cuba's parliament chose a new 31-member ruling body known as the Council of State to lead the country. The council's president serves as the head of state and government.
The vote ended Castro's 49 years as head of the communist state in America's backyard. He retains his post as a lawmaker and as head of the Communist Party. But his power in government has eroded since July 31, 2006, when he announced he had undergone emergency intestinal surgery and was provisionally ceding his powers to Raul.
In his final essay as president, Castro wrote that preparations for the parliament meeting "left me exhausted," and he said he did not regret his decision to step down.
"I slept better than ever," he wrote in the commentary published on Friday. "My conscience was clear and I promised myself a vacation."
The younger Castro has headed Cuba's caretaker government in the 19 months since then, and Fidel Castro has not appeared in public.
In a surprise move, an old guard revolutionary leader Jose Ramon Machado was named No. 2. - the slot that Raul Castro had previously held. The 77-year-old fought alongside the Castro brothers in the Sierra Maestra during the late 1950s.
Cabinet secretary Carlos Lage, who many had expected would move up into the first vice president slot, maintained his spot as one of five other vice presidents on the Council of State.
The other four vice presidents included Juan Almeida Bosque, 80, a historic revolutionary leader; Interior Minister Abeldardo Colomoe Ibarra, 68; Esteban Lazo Hernandez, 63, a longtime Communist Party leader, and Gen. Julio Casas Regueiro, 71, who was Raul Castro's No. 2 at the Defense Ministry.
The council secretary remained Dr. Jose M. Miyar Barrueco, 75, physician and historic revolutionary leader, and longtime aide to Fidel Castro and Council of State.
Fidel was among the 614 members of parliament elected on Jan. 20 but his seat was empty at Sunday's gathering. As the names of the new National Assembly's members were read aloud, mention of the absent Castro drew a standing ovation. Parliament gave another standing ovation to Raul.
In Venezuela, President Hugo Chavez who is a close friend of Castro, said the leadership change in Havana was "occurring without any type of trauma."
"Transition in Cuba?" asked Chavez, whose country is now a major economic ally of Cuba. "The transition occurred 49 years ago, from that capitalism, dominiated by imperialism, (under which Cuba) was a colony, to a socialist Cuba. The transition will continue marching forward, always with Fidel at the forefront."
