Federal Labor elected Mark Latham as its new leader, opting for a new generation of leader to take the party into next year's election.
Mr Latham won the leadership ballot 47 votes to 45 over former leader Kim Beazley.
The 42-year-old MP from western Sydney now takes over as opposition leader from Simon Crean, who stood aside after losing the support of senior colleagues and faction leaders.
Labor's returning officer Bob Sercombe said the close result was expected.
He said Mr Beazley gave a generous concession speech to his caucus colleagues.
Mr Sercombe said the mood in caucus was to unite behind the new leader to work to defeat the Howard government.
"I think the spirit in there now is very much to work together to defeat the Howard government," Mr Sercombe told reporters.
Mr Latham told reporters he was honoured to become opposition leader.
"I'm deeply honoured and we want to do good things for the country," Mr Latham told reporters.
"I just want to get to my office and see my family. I want to give my boys a hug."
Mr Latham was to hold a media conference at noon.
His election is a victory for Crean loyalists, who mostly threw their support behind the party's treasury spokesman.
Mr Latham now faces the difficult challenge of uniting the party and ending two years of instability which undermined Mr Crean's leadership.