Truss, the Foreign Secretary, defeated the former Chancellor of the Exchequer 81,326 votes to 60,399, winning 57 per cent of the vote, ABC News reports.
Forty-seven-year-old Liz Truss will replace Boris Johnson as Britain's prime minister after defeating Rishi Sunak in the Conservative leadership election.
Truss, the Foreign Secretary, defeated the former Chancellor of the Exchequer 81,326 votes to 60,399, winning 57 per cent of the vote, ABC News reports.
On Tuesday, she will head to Balmoral in Scotland to be sworn in by the Queen as the United Kingdom's 56th prime minister, becoming the third woman to hold the role after Margaret Thatcher and Theresa May.
Truss said it was "an honour" to be elected leader of the Conservative party, and thanked Sunak, saying the leadership contest showed the "depth and breadth" of talent within the party.
She also paid tribute to the outgoing prime minister, calling Johnson "my friend" in a speech following the election result.
"Boris, you got Brexit done, you crushed Jeremy Corbyn, you rolled out the vaccine and you stood up to Vladimir Putin," she said.
"You are admired from Kyiv to Carlisle."
The announcement ends a two-month process that saw eight candidates whittled down to two – Truss and Sunak – who embarked on country-wide campaigns to convince the 172,000-odd Conservative party members that they were the best candidate to replace Johnson to lead the party and the country.
Johnson was forced to resign in July after a raft of resignations from his government, stemming from a series of controversies that engulfed the former PM and his cabinet.
Truss, will need to hit the ground running, with Britain facing a cost-of-living crisis and a war on Britain's doorstep after Russia's invasion of Ukraine.
She promised to deliver a plan that would lower taxes and boost economic growth in an effort to tackle spiralling energy costs.
"I will deliver a bold plan to cut taxes and grow our economy," Truss said.
"I will deliver on the energy crisis, dealing with people's energy bills, but also dealing with the long-term issues we have on energy supply."
She will also need to reunite the deep divides within the Conservative party that has seen a popular prime minister toppled and bickering between factions and backers of both candidates.