Brasilia, Jan 1 (Agencies): Brazil's hugely popular President Luiz Inacio Lula da Silva is to step down on Saturday in a lavish ceremony ushering in his successor and protegee, Dilma Rousseff.

Rousseff's ascension will mark the first time Brazil — Latin America's biggest economy — has ever been ruled by a woman.

It is certain to be an emotional moment for Lula, a one-time shoeshine boy and factory metalworker who proved it was possible in his country to go from poverty to the ultimate position of power.

Rousseff is to kick off the ceremony inaugurating her four-year mandate at 2:15 pm (1615 GMT) with a ride through Brazil's capital in an open-top Rolls-Royce.

After dropping in on the Brazilian Congress, she will join Lula at the presidential palace, where he will drape her in the green-and-gold Brazilian official sash and the two will greet visiting heads of State and Government, mostly from Latin America.

Rousseff will then give her first speech to the nation as president, likely emphasising the importance of becoming the first female head of State — and her debt to Lula in getting her elected.

The 63-year-old Rousseff, a former guerrilla and trained economist who was Lula's cabinet chief before she decided to run to succeed him, has vowed to maintain the policies that have seen Brazil grow in prosperity and political might.

Reducing the country's vast rich-poor gap is her stated priority, but she will also face challenges in preparing Brazil to host the 2014 football World Cup and the 2016 Olympics.

But while Lula enjoyed strong world economic growth during most of his eight years in power, Rousseff is taking office amid greater uncertainty.

Inflation is creeping above the government's 4.5-per cent target, infrastructure is creaking under the strain of economic expansion, and Brazil's biggest trading partner, China, is taking steps to avoid financial bubbles.

Rousseff will also have to handle a couple of issues left over from Lula's administration.

One is a long-delayed decision on a multi-billion-dollar tender to buy 36 modern jet fighters. Lula had expressed a preference for a French fighter, the Rafale made by Dassault, but in the end said he would leave it to Rousseff to decide between that and rival bids from the United States' Boeing and Sweden's Saab.