Yoshihiko Noda, Japan's finance minister, has been elected leader of the ruling Democratic party and will almost certainly become the country's next prime minister.
The race for the party's top leadership went to a run off after all five candidates failed to win a clear majority in the first round of voting among ruling party parliament members on Monday.
In the second round, Noda defeated trade minister Banri Kaieda with 215 votes against 177.
Yoshihiko Noda elected as Japan sixth leader
Speaking to Al Jazeera from the Japanese capital, Tokyo, Hiro Katsumata, a political analyst, said: "Noda needs to call for a national election within the next two years no matter what. The main challenge for Mr Noda will be the cohesion in the party and to win in the national election."
Noda will succeed Naoto Kan, who resigned as the leader of the Democratic Party and prime minister.
Kan stepped down on Friday amid criticism over his handling of the country's response to the March earthquake and tsunami which killed thousands and triggered an ongoing nuclear crisis, and with the world's third-largest economy still struggling to shake off decades of stagnation.
Al Jazeera's Steve Chao, reporting Tokyo, said:"The question is whether the next leader will overcome the hurdles Naoto Kan did not manage to overcome and, he has to show the public that he is able to make the tough decisions that will help the country overcome its economic hurdles."
Japan's next leader faces huge challenges including a resurgent yen that threatens exports, forging a new energy policy while ending the worst nuclear crisis since Chernobyl.
The country also faces huge costs to rebuild the devastated northeast coast, which suffered the worst effects of March's twin natural disasters.