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BBC)---At an SPD party meeting in Berlin, he denounced Eurosceptics and the "racist" rhetoric of US President Donald Trump.
The convention unanimously confirmed Mr Schulz as the candidate who will lead the Social Democrats to the election.
It has been the junior partner in Germany's "grand coalition" since 2013.
The party hopes that Mr Schulz, a former president of the European Parliament, will boost its chances of governing without Mrs Merkel's CDU.
Opinion polls suggest the Social Democrats trail the CDU, although Mr Schulz's personal rating compares favourably with that of Mrs Merkel, who plans to run for a fourth term.
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In his speech on Sunday, he blamed the rise of populism on a growing gap between average workers and the rich.
The 61-year-old attacked plans by Christian Democrats to cut taxes and increase defence spending at the expense of welfare programmes.
Mr Schultz also said that as leader of the EU Parliament he had always stood up "to those who attempt to destroy this project of unity".
"Those people find in me a determined opponent," he added.
Referring to Donald Trump, he denounced what he called the president's "misogynistic, anti-democratic and racist" rhetoric.
Ahead of Sunday's convention, SPD General Secretary Katarina Barley said the party had seen 13,000 new members join this year.
Mr Schulz was the only nominee for the post of party chairman. He received 100% of the delegates' votes - an unprecedented result in the SPD's post-war history.
He replaces Sigmar Gabriel, who stepped down as chairman in January in an attempt to improve the party's chances.
A former bookseller, Mr Schulz comes from Aachen near the Dutch border and once considered becoming a professional footballer.
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