A member of the party's conservative faction and former immigration minister, Morrison defeated former Home Affairs Minister Peter Dutton by 45 votes to 40 at a closed door leadership vote earlier in the day, reports CNN.
It followed days of speculation and confusion over whether now former leader Malcolm Turnbull, who took office in 2015, could maintain his grip on the premiership in the face of a conservative uprising.
The leadership crisis began on Tuesday following a backlash in the ruling Liberal Party over Turnbull's climate change policy, which would have legislated the Paris Agreement goals.
The right-wing of the party would prefer greater investment in the country's coal sector and policies to lower Australians' power prices.
Dutton, a leader in the party's conservative faction, stood against Turnbull for the leadership in a vote on Tuesday, losing only narrowly by 48 votes to 35 and all but guaranteeing a second vote.
But as Dutton's momentum began to grow, Morrison put his hand up for the leadership in the face of questions over Dutton's eligibility to sit in parliament.
Turnbull said on Thursday that he would step down and leave Parliament following the vote, potentially cracking the government's slender one-seat majority and leading to a by-election or even a general election.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)