Suahasil, a former academic and a deputy finance minister since 2019, is the third person to take the role under President Prabowo Subianto.
He was among a number of senior officials who arrived at the state palace for a swearing-in ceremony while Purbaya was earlier seen leaving in the middle of a parliamentary hearing.
"The priority is to run a credible state budget," Suahasil said after his inauguration, adding he would commit to keeping the fiscal deficit below the legislated limit of three per cent of GDP.
"I will continue to run a trustworthy state budget, ensure trustworthy public communication and also ensure that what the state budget does supports the government's priority programs."
Prabowo's sacking of Purbaya came just days after the former economist marked one year as finance minister, with Southeast Asia's largest economy suffering a crisis of confidence among investors and analysts.
Prabowo's fiscal policies have been under scrutiny since he came to power in October 2024, especially after his government increased the fuel subsidy budget following a spike in global crude prices, raising further questions about how his costly flagship programs - including a troubled free school meals scheme - could be funded.
The straight-talking Purbaya was the second finance minister to be axed.
He was brought in to replace the widely respected Sri Mulyani Indrawati in September last year, as Prabowo sought aggressive pro-growth policies over fiscal prudence.
Purbaya did not immediately respond to a request for comment.
Purbaya's time in office was marked by economic shocks, including a plummeting rupiah currency and a ballooning fiscal deficit.
His policy of injecting quick liquidity into banks to spur growth also created friction with the central bank.
Fitch and Moody's both downgraded Indonesia's credit rating outlook from stable to negative this year, citing policy uncertainty and fiscal spending plans, battering sentiment on the G20 economy.
Purbaya in an interview with Reuters six months ago - his first with foreign media - admitted that his unconventional policies, which have broken from the country's fiscally conservative approach, were at the centre of growing concerns about how the economy is being run.
He expressed confidence that the concerns would not linger and said during the interview that he had given himself a tight timeline of six months, saying that if the economy was not moving in the right direction by then "you can lambast me as much as you like".
