The interim Transitional National Council handed authority to members of the newly elected congress this week. The 200-member assembly was elected last month in the first democratic vote in Libya in about 40 years.
Ian Martin, U.N. special envoy for Libya, said the peaceful transfer of authority shows the country's leaders and their constituents have confidence in the post-revolution climate.
"Much work lies ahead to consolidate and build on what has been accomplished," he said in a statement. "This requires all Libyans, political leaders and civil society to join hands to chart the future of their country."
Tribal clashes and administrative disputes have lingered in Libya since NATO-led intervention and civil war ended with the October death of longtime leader Moammar Gadhafi.
On Friday, the national assembly nominated former opposition leader Mohammed el-Megarif as the interim president.
"(Transition) is a profound break with the past and a great leap forward on the road to a democratic and accountable state," said Martin.