He was previously a Vatican envoy to Mexico and Nigeria and has worked on sensitive issues for the Church, including diplomatic relations with Israel.
Religious affairs expert Gianni Valente, writing for the Vatican Insider website, said Parolin was cast "in the true spirit of Vatican diplomacy".
Valente said Parolin would ensure that the Church "will once again be well placed to offer its wisdom and foresight in order to promote peace" in the world.
Italian President Giorgio Napolitano said Parolin's appointment would help "enrich" relations between Italy and the Vatican and promote joint work between the two "to protect peace and justice".
Bertone has held the post since 2006 when he was named by the pope's predecessor Benedict XVI and has proved a highly controversial figure in the hierarchy
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