By James Murray, Hannah Sarney and Rod McGuirk
Australia now has its first female prime minister after Kevin Rudd stood down and the leading party installed his deputy as leader.
See Kevin Rudd's full speech here
Julia Gillard will lead the government to elections due within months.
She stood unopposed at a vote of the Labour Party's 112 lawmakers at a meeting today, hours after a revolt against Rudd.
"I feel very honoured," she told reporters afterward.
Rudd didn't even stand for reappointment in the vote - a signal that he knew his support had collapsed.
Rudd had ridden high in opinion polls as one of the most popular Australian prime ministers of modern times until he made major policy backflips, including a decision in April to shelve plans to make Australia's worst polluters pay for their carbon gas emissions.
The leadership change is unlikely to alter Australia's key policy positions, such as its troop commitment to Afghanistan.
View photos of Kevin Rudd and Julia Gillard’s working history.
Since she is leader of the majority party in Parliament, Gillard's swearing in as prime minister is a formality.
Rudd, who won a landslide election victory less than three years ago, appeared composed after the meeting, but declined to speak to the media.
The government's key financial minister, Treasurer Wayne Swan, was elected deputy prime minister unopposed.
Gillard was born in Barry, Wales, in 1961, the second daughter of a family who migrated to Adelaide, Australia, when she was a four-year-old child in search of a warmer climate for her lung complaint.
A former successful lawyer, she has been attacked by some opponents as unsuitable to lead because she is childless and therefore out of touch with most Australians.
Gillard supporter Sen. Kate Lundy said Gillard will turn around the government's poor polling which triggered the leadership challenge.
"I think she'll inspire a new confidence in Labour," Lundy told Australian Broadcasting Corp. radio.
"I think we were at risk (of losing the next election) and I think Julia presents a much stronger opportunity for us," she added.
Despite Australia's weathering the global downturn, recent polling puts the centre-left government neck-and-neck with the conservative opposition.
One poll earlier this month showed Labour trailing the opposition for the first time in more than four years.
Rudd called a late night news conference to announce the vote of Labour lawmakers after Gillard said she would challenge him for the leadership.
She had been approached by key factional power brokers in the party who told her that they had abandoned Rudd to support her, Australian Associated Press and Nine Network television reported, without citing sources.
Rudd was due to fly to a summit of Group of 20 major economies in Canada hours after the ballot. It is unclear who will now represent Australia.
Rudd is a Labour hero, having led the party to victory at 2007 elections after 11 years in opposition.
3 News / AP
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