Steinmeier, who was formerly a foreign minister, is from the center-left Christian Democratic Party.
The president as head of state represents Germany overseas, which might lead to tension in Berlin's relation with the United States.
Regarding his profile and leadership, Steinmeier stands out for his pragmatism with the media and his recent harsh statements against his United States counterpart Donald Trump, which he described as a 'hate preacher'.
Last month he warned Trump against dismantling the 2015 nuclear accord with Iran. Steinmeier succeeds Joachim Gauck, a former Lutheran pastor and civil rights activist in the former East Germany.
"Our hand should remain outstretched for respectful cooperation based on ... openness, honesty and what our constitutions stand for - freedom, democracy and the rule of law, as well as mutual responsibility".
"For Germany's Social Democrats, Steinmeier's election is a prelude to something bigger to come: a victory in Sept's elections against Merkel", said Broening.
Steinmeier has always been one of Germany's most popular politicians.
Merkel congratulated him on Sunday and said she was convinced he would be an excellent president who would enjoy wide support.
In 2010, when he was Germany's main Opposition leader, Steinmeier made a decision to take a break from politics to donate a kidney to his wife, Elke Budenbender, a judge at Berlin's administrative court.
His Social Democrats (SPD) hope the appointment will boost their fortunes just as their candidate Martin Schulz, the former European parliament president, readies to challenge Chancellor Angela Merkel in September elections. Both sides hope to end the "grand coalition". As former Chancellor Gerhard Schroeder's chief of staff, he was a main architect of Schroeder's 2003 package of economic reforms and welfare cuts.
Under Ms Merkel, he served twice as foreign minister - from 2005 to 2009 and again from 2013 until this year, with a stint as opposition leader in between.
This story has been corrected from an earlier version to show the surname of Steinmeier's wife is Buedenbender, not Buedenbende.