Vallini, 68, is nine years younger than his predecessor and described as much less interested in political issues.
By tradition, the pope is the bishop of Rome, so he names a vicar to assist him.
Vallini, whom Pope Benedict made a cardinal in March 2006, has served the past four years at the head of the Supreme Tribunal of the Apostolic Signatura, the Vatican's highest judicial authority.
The Rome diocese, symbolically the most important in the world, counts 336 parishes and nearly 6,000 priests -- though two-thirds of them belong to religious orders and work mainly outside of the parish structure.
The Italian capital has a population of some 2.8 million.
Ruini, who had headed the Rome diocese from 1991, stepped down last year as president of the Italian Bishops Conference and was replaced by Genoa Archbishop Angelo Bagnasco.
The division of labour between Vallini and Bagnasco will enable Cardinal Tarcisio Bertone, the Vatican secretary of state and the pope's right-hand man, to call most of the shots in the Italian Catholic Church, observers say.
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