The mayor administered the oath of office to Chu at 5:38 p.m. today.
Jew submitted his resignation Wednesday and the District Four Supervisor post officially became vacant at noon today.
"Over the last two days, there has been an outpouring of support from the community for Supervisor Carmen Chu," Newsom said. "It is clear that she has done an extraordinary job for her constituents as an interim supervisor, and I am proud to say that she has agreed to serve as a member of the board of supervisors."
Chu will remain in office until an election in November.
"I am confident that in this role she will continue to distinguish herself as an advocate for her constituents," Newsom said.
Jew, who faces criminal fraud and extortion charges in state and federal courts, decided to resign as supervisor "because I feel it is best for my family and for my district under the current situation," he said.
In exchange for the resignation, Newsom and City Attorney Dennis Herrera will drop two separate proceedings in which they sought to oust Jew permanently from the board for allegedly lying about his residence when he ran to represent the city's Sunset District in 2006.
Jew, 47, the owner of a Chinatown flower shop, will continue to face two criminal prosecutions - state charges of lying about his residence and federal charges of extortion of local businessmen seeking city permits.
Jew is alleged to have lived in Burlingame rather than the Sunset District and to have lied about it when he announced his candidacy and during his first five months in office.
In the federal criminal case, Jew is accused of mail fraud, bribery and extortion in connection with an alleged scheme to solicit $84,000 from the owners of eight tapioca drink shops and a dessert cafe in exchange for help in obtaining city permits.
Newsom said Jew's resignation is "a very good thing for the city" and said he wished Jew had resigned last year when the residency and extortion allegations arose.