The land of Hans Christian Andersen fairy tales has inked a modern-day classic with Frederik and his Australian-born wife Mary sharing a kiss after becoming the new king and queen of Denmark.

An emotional King Frederik blinked back tears as he stood on the balcony of Christiansborg Castle where tens of thousands gathered in Copenhagen’s 3C temperature for the new monarch.

Denmark’s next-generation king and queen beamed at each other, laughing and waving, and then sealed the historic moment with a kiss which drew cheers from the elated crowd.

Their relationship has been overshadowed in recent months by tabloid speculation of an affair after 20 years of marriage. But they put on a united front on Monday (AEDT), holding hands and looking into each other’s eyes.

They were joined by their four children, including the next future king and their eldest child Crown Prince Christian, 18.

The king and queen with their children Princess Isabella, Crown Prince Christian, Princess Josephine and Prince Vincent. Photo: Getty

The Danish prime minister officially proclaimed King Frederik X – a former party-boy prince turned family man – on the balcony at the Danish parliament as confetti rained down over the flag-waving masses.

The royal transition was a low-key affair as Denmark, one of the oldest monarchies in the world, does not have a coronation.

”My hope is to be a unifying king of tomorrow,” King Frederik told the crowd.

”It’s an assignment I’ve been preparing for my entire life.”

“It’s a responsibility I’m taking on with respect, pride and immense joy.”

The 55-year-old monarch said he started his journey knowing he wasn’t alone.

“I need all the support I can get from my beloved wife, my family and from God,” he said.

Tens of thousands of well-wishers at Christiansborg Palace Square. Photo: Getty

The hugely popular royal couple are set to bring generational change to the Danish throne, more than 23 years after their fairytale romance started in a Sydney pub during the 2000 Olympics.

Mary, 51, was dressed in a white gown while Frederik wore full gala uniform and a blue sash.

Beloved chain-smoking octogenarian monarch Queen Margrethe II, who has been on the throne for 52 years, flagged in a bombshell New Year’s Eve message, that she would be the first Danish royal to abdicate the throne in 900 years.

The succession was formalised on Sunday (local time) the moment Margrethe signed the declaration of her abdication during a meeting of the Council of State at parliament, the royal palace said.

The meeting was attended by government representatives, Margrethe, Frederik, 55, his Australian-born wife Mary, 51, who is now Queen and their oldest son Christian, 18, who is the new heir to the throne.

The abdication document was presented to Margrethe as she sat at a massive table covered in red cloth around which royals and members of the Danish government were seated.

After signing it, a clearly emotional Margrethe rose and gestured to Frederik to take her place.

“God save the King,” she said as she left the room.

After signing the declaration of abdication, Queen Margrethe II of Denmark leaves the seat at the head of the table. Photo: Getty

The abdication leaves Denmark with two queens: Margrethe keeps her title while Frederik’s wife becomes Queen Mary.

About an hour after the signing, Prime Minister Mette Frederiksen proclaimed Frederik king on the balcony of the parliament and he gave a short speech.

The PM read the proclamation three times, which is the tradition, as King Frederik stood beside her wearing a ceremonial military uniform adorned with medals.

Danish Prime Minister Mette Frederiksen proclaims the accession to the throne. Photo: Getty

He was then joined on the balcony by new Queen Mary and the couple’s four children and the crowd spontaneously sang the national anthem.

The royal couple rode home to their residence at Amalienborg Palace in an 1891 black-lacquered mahogany horse-drawn coach, while across the harbour military personnel fired cannons in a three-by-27-shot honorary salute.

There were more celebratory explosions earmarked at Copenhagen’s famed Tivoli Gardens amusement park – the biggest fireworks extravaganza in its 180-year history.

Festive fireworks explode at Tivoli park in Copenhagen. Photo: Getty

Among the sea of red and white Danish flags were some blue ensigns decked with the Southern Cross – a nod to Mary’s homeland.

Brisbane biomedical science university graduate Ebony Wilson, 25, and her grandmother Judy bought a last-minute plane ticket for Copenhagen on Wednesday to be part of the moment in history.

“I was thinking about it and then I thought, why not be spontaneous? It’s a once-in-a-lifetime opportunity,” Wilson said in Copenhagen.

In Australia, royal enthusiasts celebrated at the Sydney’s Slip Inn where the two first met, and in Mary’s home state of Tasmania, where landmarks were lit up in Denmark’s red and white colours.

The royal couple kick off their roles on Monday with a reception at the Danish parliament.

The couple will continue to live with Margrethe in Amalienborg, albeit in their respective palaces in the octagonal complex.

Denmark’s king and queen leave by carriage from Christiansborg Palace. Photo: Getty

Margrethe, who in the past had said she would remain on the throne for life, did not give an exact reason for her decision to step down but said that a major back surgery she had in February last year had made her consider her future.

“It could be that she thinks Prince Frederik is prepared to take over now,” said Lars Hovbakke Sorensen, a historian and associate professor at University College Absalon in Denmark.

The new King and Queen take the throne at a time of huge public support and enthusiasm for the monarchy.

The most recent survey done after Margrethe announced she would abdicate indicated that 82 per cent of Danes expect Frederik to do well or very well in his new role while 86 per cent said the same about Mary.

-with AAP