Mr Jonathan, who was promoted from vice-president after the death in office last year of Umaru Yar’Adua, won a decisive election victory last month.
However, the country still has serious divisions and there were deadly post-election riots.
Heads of state from Africa and beyond are attending the ceremony at Eagle Square in the country’s capital, Abuja.
The election was largely considered free and fair but hundreds of people were killed in three days of rioting following the announcement of the result.
Mr Jonathan, 53, won nearly 60% of the vote.
He is a southern Christian and had defeated his leading challenger from the mainly Muslim north.
Mr Jonathan’s nomination also required changing a ruling party tradition of alternating between candidates from the north and south.
The BBC’s Jonah Fisher in Abuja says the pressure is now on the winner to deliver on his many election promises.
On the campaign trail Mr Jonathan said fixing Nigeria’s threadbare power sector would be a priority as would be reforming agriculture to increase food production.
Our correspondent says President Jonathan will not have to perform miracles to be hailed as a success – given the country’s history of mismanagement and corruption most Nigerians would gladly accept some firm steps in the right direction.
Mr Jonathan will face the issue of continuing Christian-Muslim conflict and the simmering tension in the oil-producing Niger Delta