Kejriwal's decision to use public transport echoes his pre-poll promise to end the VIP culture of Delhi's political elite and set a down-to-earth tone for his new administration.
"I will take the metro to reach Ram Lila Maidan (ground) for the oath-taking ceremony," Kejriwal, 44, told reporters in Ghaziabad, a satellite city of Delhi.
"My ministers in the cabinet will also take the metro to reach the venue," added Kejriwal, who had turned down a police offer of security cover for him.
Normally, Indian chief ministers and other politicians travel in convoys with sirens wailing, their vehicles packed with armed security men. Traffic is held up as the multi-car convoys pass, often angering motorists.
The Delhi Police Commissioner had also offered a personal security officer (PSO) at all times to the former tax inspector, the Times of India newspaper reported.
But Kejriwal responded: "Thank you for offering me a PSO. But I don't need any PSO. God is my biggest PSO."
The 44-year-old Kejriwal is the founder leader of the fledgling Aam Aadmi (Common Man) Party which won the second highest number of seats in the state assembly polls earlier this month.
The party, born out of an anti-corruption movement that swept India two years ago, has tapped into a rich vein of anger about everyday graft as well as scandals that have embroiled the national government.
Kejriwal will lead a minority administration after his party accepted support from the Congress party, which ended a distant third in the polls.
The Congress party, in power at a national level, ran New Delhi for years before being trounced in the state elections.
The Hindu nationalist Bharatiya Janata Party won the most seats in the assembly but declined to form a government without a majority.
The decision to have the swearing-in ceremony at the Ram Lila Maidan, a sprawling public ground in central Delhi, is a departure from normal practice with such functions usually hosted at the lieutenant governor's palace.
The ground was also the venue for a massive anti-corruption movement led by Kejriwal's one-time mentor Anna Hazare.
The duo fell out last year after Kejriwal announced his decision to form his own political outfit.
Kejriwal said his party was keen to have the swearing-in ceremony at a public venue.