Schulz's election comes as the group looks to strengthen their position in the upcoming negotiations regarding the future commission head.
The new S&D leader has now stood down from his previous role as parliament president, with Italian MEP and former vice-president Gianni Pitella taking the helm for the remaining 13 days of the current legislature.
Speaking after his election, Schulz said, "I am very happy about the trust the S&D group have shown me today.
"Jean-Claude Juncker should be given a mandate to find a majority in the European parliament, with a clear commitment from all democratic groups"
"I know this group very well and have worked with my colleagues here for it to become the pan-European and progressive force it is today.
"This election has given me the full backing of our MEPs - from 28 countries - to lead effectively in the negotiations for the future EU commission president and their policy programme, as well as the future structure within the European parliament," he explained.
The German deputy continued, "The S&D group is the second largest political group in the parliament and together we stand for a different, fairer and socially balanced Europe.
"We will continue our fight against the rule of harsh austerity in the EU and we will also focus on the fight against tax evasion.
"However," he added, "people also want to be able to trust Europe and their politicians.
“It is time to start working on the Europe of tomorrow we all need"
"Making Europe more democratic and rebalancing its powers to make it more effective will be another priority for us," he stressed.
Speaking on the commission presidency, he said, "We must not delay a process which the people of Europe have voted on. Jean-Claude Juncker should be given a mandate to find a majority in the European parliament, with a clear commitment from all democratic groups.
"However, our group will only support a commission president who is ready to take on the big challenges in the EU: ending austerity, tackling unemployment - especially among the young - curbing the rise in poverty and social exclusion, beating the tax cheats and making Europe competitive with more investment, modernised infrastructure and a more flexible interpretation of the stability and growth pact."
“It is time to start working on the Europe of tomorrow we all need," concluded Schulz.
Reaction on Twitter