Thousands of raucous Ramaphosa supporters sang and chanted in the conference hall as rival backers of defeated candidate Nkosazana Dlamini-Zuma appeared dejected yesterday.
Ramaphosa won 2,440 votes to Dlamini-Zuma's 2,261.
"We declare comrade Cyril Ramaphosa the new president of the African National Congress," an official told party delegates in Johannesburg.
The victory puts Ramaphosa in line to succeed President Jacob Zuma, whose reign has been plagued by corruption scandals, economic slowdown and growing anger at the once- omnipotent party.
President Zuma was seen as backing his former wife Dlamini-Zuma, allegedly to secure protection from prosecution on graft charges after he leaves office.
But his loyalists did win senior positions in the vote, including David Mabuza as party deputy chief, meaning Ramaphosa is likely to face strong internal opposition to his pro-business reform agenda.
"I hope you will cooperate with the new leadership," Baleka Mbete, party chairwoman, told delegates.
The ANC, which has ruled since 1994 when Nelson Mandela won the first multi-racial vote, faces a struggle to retain its grip on power in the next election due to falling public support.
"The party will decide if Zuma goes (before the 2019 election)," Mzwandile Mkhwanazi, a delegate from KwaZulu-Natal province, told AFP.
"Ramaphosa's victory is good for the country. We need a stable country, a president able to fight corruption. We think he is up to the task."
Ramaphosa, 65, is a former trade unionist leader who led talks to end white-minority rule in the early 1990s and then became a multi-millionaire businessman before returning to politics.
He is often accused of failing to confront Zuma while serving as his deputy since 2014.
Dlamini-Zuma was head of the African Union commission until earlier this year and a former interior, foreign affairs and health minister.
She had four children with Zuma before divorcing in 1998.
"I believe Ramaphosa will work to bring back the principles of liberal politics in the party," Amanda Gouws, politics professor at Stellenbosch University, told AFP.
Allegations swirled of delegates being targeted with bribes, but ANC spokesman Khusela Sangoni told reporters that the process had proceeded "smoothly".
"I'm bowing out very happy because I think... I made my contribution," President Zuma, 75, said yesterday as he walked through the vast conference centre hosting the five-day event.
Soaring unemployment and state corruption have fuelled frustration at the ANC among millions of poor black South Africans who face dire housing, inadequate education and continuing racial inequality.
"We have Ramaphosa, who may be able to steer the ship in the right direction."
The opposition Democratic Alliance party said that the ANC was "held together only by the glue of patronage and corruption, and Cyril Ramaphosa is just a new face to the same old ANC.
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