SANTIAGO, March 11 (AFP) - Tycoon Sebastian Pinera takes over the presidency of Chile on Thursday faced with the challenge of rebuilding a nation devastated by one of strongest ever recorded earthquakes and a tsunami.

Popular outgoing President Michelle Bachelet will hand over to Pinera at 12:00 pm (1500 GMT) at the seat of Congress in Valparaiso, 120 kilometers (75 miles) west of the capital Santiago.

His first task as president will be to visit inhabitants of the coastal town of Constitucion, one of the worst damaged after last month's 8.8-magnitude quake and the giant waves that followed, leaving almost 500 confirmed dead, at least 260 missing and some two million homeless.

Pinera's January victory spelled an end to the ruling left-wing coalition that has governed Chile since the end of General Augusto Pinochet's dictatorship 20 years ago.

"We won't be the government of the earthquake, we'll be the government of reconstruction," Pinera said after the February 27 disaster, naming five new governors in each of the worst-hit central regions.

The 60-year-old not only faces the challenge of reconstruction -- which analysts estimate could cost up to 15 billion dollars -- but also takes over from a highly popular outgoing leader.

President Michelle Bachelet scored an 84 percent popularity rating in a post-quake survey, even amid criticism of a slow government reaction to the disaster.

Bachelet on Wednesday issued a farewell statement to the country, boasting that her ruling Concertacion Party under her and three other presidents in the past 20 years turned Chile into "a country of high credibility."

The outgoing president, however, said she was leaving with continued concern for the victims of the earthquake and tsunami.

"The earth and the sea have hit us very hard, reminding us that despite our strength and firmness we can never be safe from nature's onslaught," she said.

Pinera on Wednesday played a friendly game of football with visiting Bolivian President Evo Morales and former Chilean soccer stars, in a show of solidarity with earthquake victims and neighborly friendliness.

Pinera scored the first goal of the game.

Pinera, a self-proclaimed centrist, has promised that he will build on the policies practiced by his predecessor, rather than replace them.

After vowing austerity during his campaign, he was now expected to ramp up spending, borrow abroad and dip into savings from export revenues from the key copper mining industry.

During his campaign, Pinera deflected accusations of potential conflicts of interest between his political ambitions and his corporate empire, promising to sell the bulk of his shares in airline LAN Chile before taking office.

He also successfully put a distance between himself and Pinochet's dictatorship, which had enjoyed the backing of several right-wing parties now behind the billionaire.

Although Chile's economy shrank two percent last year, its first contraction in a decade, it was forecast before the quake to grow between 4.5 and 5.5 percent this year.

Pinera had pledged to boost annual growth to six percent as the Latin American model of economic success emerged from the financial crisis, and to create one million jobs.

Now, job opportunities were expected to grow in the construction industry but the challenge of trying to reduce the country's massive rich-poor divide was further complicated.