Angela Merkel has been sworn in for a rare third term as German chancellor, capping months of political uncertainty as she bartered with her rivals to help govern Europe's top economy.

Tuesday's vote in the Bundestag was a formality as the ruling parties hold an overwhelming majority of the seats. A total of 462 lawmakers backed Merkel for chancellor, with 150 voting against and 9 abstaining.

Eighty-six days after Merkel swept to victory in elections but failed to grab an outright majority, the lower house of parliament voted on handing her another four-year term.

With a whopping 504 of the 631 seats, Merkel's conservatives and their new centre-left partners, the Social Democrats (SPD), hold a comfortable majority under their hard-fought 'grand coalition' deal.

Merkel must be confirmed by President Joachim Gauck at the presidential palace before returning to the Bundestag to be sworn in as Germany's only third post-war chancellor to win a third mandate.

The ceremony and later swearing-in of ministers followed by the first cabinet meeting will enable Merkel to finally get back down to business in earnest after the longest government-building period since World War II.

Merkel is then due to address parliament on Wednesday and travel to Paris for talks with President Francois Hollande the same day, ahead of an EU summit at the end of the week.

A parliament debate after Wednesday's address will be the first opportunity for a face-off across the floor since the SPD moved off the opposition benches.Merkel has defended the time spent haggling over policy and posts with an initially reluctant SPD as time well spent, voicing appreciation on signing the coalition pact Monday "that we listened to each other".

'Solid finances'

Few observers doubt though that the road ahead will be bumpy.

Merkel on Monday pledged "solid finances, secure prosperity and social welfare" and said that "a grand coalition is a coalition for grand tasks-- we want to make sure that the people in 2017 are better off, even better off, than they are today".

News magazine Spiegel online commented that Merkel was "at the peak of her power".

"The red-hued coalition agreement admittedly asks a bit of the (conservative) Union but when you get more than 41 percent in a federal election that's enough to calm your own people."

Merkel keeps her trusted lieutenant Wolfgang Schaeuble as finance minister to continue Berlin's tough loans-for-reform stance toward troubled eurozone countries and as the watchful guardian of the German public purse.

The SPD gets the foreign ministry, where Frank-Walter Steinmeier returns as Germany's top diplomat, while the CDU's rising star Ursula von der Leyen, a worldly high achiever and mother-of-seven, takes over the defence ministry.