Martin, who won by an overwhelming majority of votes over his only other challenger, Sheila Copps, on Friday, takes over the post from archrival Prime Minister Jean Chretien.
Ther move is a prelude to Martin taking over as prime minister when Chretien, who sacked him in June 2002 for plotting against him, quits as prime minister in the next few weeks.
After Copps's concession, Martin said he would work to fulfill the Liberal Party's goals.
"Canada's role in the world is a... great priority for me. Obviously our relationship with the United States is a part of that," he said.
Next prime minister
The new Liberal Party leader automatically becomes the next prime minister, since the party holds the most seats in the House of Commons.
When Chretien announced his retirement in August 2002 - after nearly 10 years in power - he set February 2004 as his departure date.
That month was expected to coincide with a party leadership convention.
But Martin's Liberal Party friends pushed the convention date forward to November, throwing both the outgoing prime minister and the incoming Liberal Party leader into limbo.
And Chretien appears to be in no hurry to hand over the reins.
"Canada's role in the world is a... great priority for me. Obviously our relationship with the United States is a part of that"
New Liberal Party leader
"I'm still around for a few weeks, a few months - I don't know," Chretien hinted at the convention on Thursday.
The prime minister, who turns 70 on 11 January, said he will discuss his exact departure date on Tuesday, after the election of the new leader.
But Chretien has already called Parliament to convene on 12 January - a sign, insiders say, that he may step down before that date.
Martin, who has repeatedly said he will await Chretien's decision to relinquish control, said he has little intention of reopening Parliament as early as 12 January.
One thing is clear - the bitter rivalry between the two men is obvious as the change in leadership approaches.
Chretien, who was re-elected for a third mandate in November 2000, has said he would have left at the end of 2000 if Martin's supporters were not so eager to get him into office.
Despite the enmity, Chretien wished Martin well during his farewell bash as party leader on Thursday.
"Paul Martin will need all our support - the support of all of us. And I can assure Paul that he has my support," said.