State television broadcast a meeting of the single-chamber National Assembly, at which lawmakers listed the virtues of Bounnhang, who was appointed Communist Party leader in January.
"The National Assembly has approved Bounnhang Vorachit as president, with more than two-thirds of the votes," said assembly chairwoman Pany Yathotou.
The 149-member assembly completed the process of nomination and voting for both candidates in around an hour.
In his acceptance speech, Bounnhang said he would strive for "peaceful international policies, unity, friendship and cooperation".
One of the fastest-growing economies in East Asia, landlocked Laos has averaged GDP growth of 7 percent over the past decade, with increasing use of natural resources contributing a third of output growth, the World Bank says.
This has boosted incomes and access to electricity, telecoms and healthcare for its mostly rural population of 6.7 million.