Hundreds of people, including film-makers Sir Peter Jackson and Reddy’s former neighbour James Cameron, were at Parliament’s grounds on Wednesday morning.
Reddy, who succeeds Sir Jerry Mateparae, accepted the Rakau Tapu ceremonial challenge and was welcomed to the ceremony.
She and husband Sir David Gascoigne then met with mana whenua for hongi, several short haka and met Prime Minister John Key.
Pomp and ceremony continued as she moved to the saluting base, receiving a general salute from the Royal Guard of Honour and was then sworn in.
The formalities continued with Chief Justice Dame Sian Elias administering the affirmation of allegiance and affirmation of office.
Later, Reddy, 62, inspected the Royal Guard in front of Parliament.
Key then addressed the ceremony. He said governors-general in recent years had better reflected New Zealand’s diversity.
The first New Zealand-born governor-general was not sworn in until in 1967.
Reddy said she was happy to have been approached about the job. “I want to encourage greater diversity in our leadership,” she said.
“When the prime minister first asked me if I would consider being New Zealand’s 21st governor-general, he pointed out that the role would provide me with a unique opportunity to make a worthwhile and lasting contribution to New Zealand and the lives of New Zealanders.
“That was a challenge that I could not easily ignore.”
The national anthem was played, while the air force band also played Pokarekare Ana, understood to be Reddy’s choice, and the New Zealand Opera Chorus sang Hine e Hine.
In her new role, Reddy is commander-in-chief of New Zealand’s armed forces and the Queen’s representative in the Realm of New Zealand, which includes Niue, Tokelau, the Cook Islands and the Ross Dependency in Antarctica.
Reddy thanked her husband, whom she called her “confidant and adviser”.
The new governor-general also thanked other family members, friends, and previous governors.
She made special mention of immediate predecessor Mateparae, and Dames Cath Tizard and Silvia Cartwright, New Zealand’s first and second female governors-general.
She approached her role with “some trepidation, but also enthusiasm”, she said, after spending about six months preparing for it.
Cameron told NZME that Reddy was an “astonishingly talented and competent woman”.
“We got to be quite chummy … She has got a big vision of what she can do as governor-general.
“She has done a good job with everything she has ever done, and she has done an awful lot of things.”
Dame Patsy is out 21st Governor-General, or our 36th if you include the Governors also. She becomes our effective head of state, representing the Queen.