Morrison, who will be Australia’s sixth prime minister in less than 10 years, emerged victorious from a three-way race with former home affairs minister Peter Dutton and Foreign Minister Julie Bishop.
Incumbent Prime Minister Malcolm Turnbull, who called the leadership meeting after losing the majority support of the party, opted not to contest the vote.
The Liberal party is the senior partner in the ruling conservative coalition. The Liberal-National government has consistently trailed opposition Labor in opinion polls in recent months.
The leadership battle was sparked on Tuesday by an unsuccessful challenge by Dutton, who narrowly lost a vote against Turnbull.
Under intense pressure to call a second vote, Turnbull convened a party meeting on Friday after receiving a letter signed by the majority of party members calling for a change of leader.
Turnbull said before the ballot that if he lost the prime ministership he would resign from parliament, leaving the new government facing a by-election for his Sydney seat that could see it lose its one-seat majority.
Australian media reported that foreign minister Bishop, having been defeated in the leadership ballot, would likely also resign from politics.
Turnbull came to power in a party-room coup in September 2015. A social liberal and multi-millionaire former merchant banker, he has struggled to appeal to conservative voters and only narrowly won a general election in 2016.
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