Win Myint, 66, had been tipped for the role after former president Htin Kyaw suddenly stepped down last week, citing the need for rest.
Suu Kyi is barred by the military-drafted constitution from the presidency because she was married to a foreigner and has two sons who are British citizens. She has instead served as state counsellor since her party's landslide 2015 election victory, declaring she would work "above" the president.
But her position has no official constitutional role.
That makes it crucial for her to have a compliant friend as president as she manages an often fraught power-sharing arrangement with the still powerful military, which ruled the country for almost half a century.
"I hearby announce that U (honorific) Win Myint, who obtained the majority of votes, is elected as President of the State," said parliament speaker Mann Win Khaing Than.
Win Myint, who resigned as lower house speaker last week, swept up nearly two thirds of the votes in a parliament dominated by Suu Kyi's National League for Democracy (NLD) party.
He beat two opponents, including the military-backed acting president Myint Swe.
The former lawyer remains one of Suu Kyi's inner circle -- the pair fought side-by-side during the 1988 democracy movement that was violently quashed by the junta and saw Win Myint, alongside many others, being taken political prisoner.
As Myanmar emerged from outright military rule, Win Myint won his seat in 2012 by-elections, the same vote that elevated Suu Kyi to parliament after a combined 15 years of house arrest.
She is still widely regarded as a heroine within Myanmar even though her reputation lies shattered globally for failing to speak up on behalf of the country's Rohingya Muslim community.
An army crackdown has driven almost 700,000 of the persecuted minority out of the country since last August.
Her supporters say she has her hands tied by the military, which retains control over three key ministries -- home affairs, borders and defence -- and is guaranteed a quarter of the parliamentary seats.
Supreme Court advocate Khin Maung Zaw worked with Win Myint in recent years and said: "He is an honest person, he is quite hard-working, but sometimes he is stern."
As speaker he was known for his passion for protocol, famously dressing down members of parliament for failing to don the correct clothing.
His tenure was marked by "exerting strict control over the MPs", said Khin Zaw Win, director of Yangon think tank The Tampadipa Institute.
Activists have been frustrated with his reluctance to abolish a controversial online defamation law that has seen dozens of people face charges for Facebook posts critical of the government or military.
Observers say his appointment is unlikely to change politics much although he could assume some duties from Suu Kyi, who has been notoriously unwilling to delegate.
"We cannot expect a very high political impact on Myanmar democratisation," said independent analyst Yan Myo Thein.
Political analyst Yan Kyaw said that while Win Myint's profile may rise, "he won't do anything against Daw Aung San Suu Kyi".//AFP