Princess Beatrix of Netherlands (C), her son, Dutch King Willem-Alexander (L) and his wife Queen Maxima wave to the crowd from the balcony of the Royal Palace in Amsterdam April 30, 2013. [Photo/Agencies]

AMSTERDAM - Queen Beatrix of the Netherlands abdicated on Tuesday, handing over to her eldest son, Willem-Alexander, who became the first King of the Netherlands in over 120 years.

An estimated 25,000 well-wishers cheered outside the Royal Palace in Amsterdam as the abdication and automatic succesion were broadcast live.

The crowds had gathered in Dam Square from early on Tuesday to see the new King and his wife, Queen Maxima, as they stepped out onto the balcony of the Royal Palace. Beatrix blinked back tears as she presented her son.

Wearing a sober purple dress, Beatrix signed the abdication document in front of the Dutch cabinet, Willem-Alexander and Maxima, who wore a pale rose-coloured dress with a shimmery skirt and enormous bow on her left shoulder.

"Today, I make way for a new generation," said Beatrix, 75, who now takes the title of Princess.

Willem-Alexander, a 46-year-old water management specialist, is expected to bring a less formal touch to the monarchy together with Maxima, a popular former investment banker from Argentina.

April 30, or Queen's day, is always a day for partying in the Netherlands. Many people took Monday off work and started celebrating in earnest from Monday evening with street bands and music.

Beatrix chose to retire after 33 years in the role, following in the tradition of her mother and grandmother.

Amsterdam has been awash with orange, the royal colour, for days. Houses were covered in bunting and flags and shop windows were stuffed with orange cakes, sweets, clothes and flowers.

Nearly a million people were expected to join the street party with dancing to bands and DJs, helping create a carnival atmosphere.

"He (Willem-Alexander) knows what is needed. He unites people. He has made it possible for the different generations to mingle more," said 40-year-old Margriet Dantuma, dressed in an orange skirt, as she joined others on the Amsterdam pavements putting out impromptu stalls of bric-a-brac for sale.

The royals are broadly popular, with 78 percent of Dutch in favour of the monarchy up from 74 percent a year ago, according to an Ipsos poll.

But they have been stripped of their political influence, and no longer appoint the mediator who conducts exploratory talks when forming government coalitions.