Kremlin-watchers say the appointment ushers in an unprecedented era in Russia that essentially features two centers of power.
Freshly sworn-in President Medvedev encouraged deputies to approve Putin's candidacy in an address to the extraordinary legislative session.
"We know how much President Putin has done to strengthen Russian statehood, to strengthen our country's security," Medvedev told the lawmakers. "We also know how Russia's international position has changed fundamentally. To put it simply, Russia has once again become respected."
The vote was seen by many Russians as a technicality, since the pro-Kremlin Unified Russia party that Putin leads holds more than two-thirds of the seats in parliament. Members of Unified Russia were joined in supporting Putin by the Liberal Democratic Party of Russia and A Just Russia.
Only the Communist Party, which has a small faction in parliament, voted against Putin's appointment.
Putin is still enormously popular among Russians, many of whom had wanted him to change the constitution so that he could stay on for a third term as president.
Medvedev, a long-term friend and ally of Putin's, is expected by many to defer to his new prime minister on some key issues.
If members of parliament had doubts about the new balance of power, Medvedev sought to reassure them: "All these previous years we have worked together. We continue to work together now and I think no one has any doubts that our tandem, our cooperation, will only strengthen."
Members of the Communist Party complained that the vote had been raced through parliament too quickly for there to be any real choice. Ordinarily, appointing a new prime minister is a lengthy process that can take up to three weeks. But Medvedev said the vote had been brought forward so that it wouldn't interfere with Victory Day celebrations on May 9 to mark the end of World War II.
Speaking at length before the vote, Putin, who ran the country from 2000, promised to tackle rising inflation, build new houses, increase benefits for families and improve conditions in the armed forces. He spoke of the successes of the last eight years but warned the country against self-satisfaction.
"We have large, enormous, grandiose tasks ahead of us, and we are not just speaking about legislative procedures, as outlined by the constitution and our laws," Putin said. "Every person, every individual sitting here in this hall and in the presidium, every one of us must not only look at what we have accomplished in the past. We must all look to the future."
In the weeks leading to his departure as president, Putin has reinforced the role of prime minister. He has signed decrees that make regional governors accountable to the prime minister, rather than to the president. He has also transferred some key members of his presidential administration to the prime minister’s office.
Parliamentarians gave Putin a standing ovation following his appointment. Medvedev, who as president must endorse the appointment, has promised to do so later in the day.