Joan Burton was elected leader of the Labour Party, the junior partner in Ireland's coalition government, and was swiftly installed as the country's deputy prime minister.
Eamon Gilmore, the previous Labour leader and deputy PM, stepped down from both roles in May following huge losses for the party in the local and European Parliament elections.
Burton, 65, had been Labour's deputy leader since 2007. She retains her post as minister for social protection, leading welfare reform, but is soon expected to reshuffle the Labour ministers in the government.
Burton beat Alex White, a junior health minister, by 77 per cent to 22 per cent in the vote to become Labour's new leader, state broadcaster RTE reported.
"I'm deeply honoured and humbled to lead our great Labour Party," she said.
"Many individuals, families and communities have experienced the worst of times since the economic crisis first struck, but I'm optimistic that the best of times are still ahead of us."
Labour "will be the force that creates a better future for our country", she said.
Burton is the first female Labour leader.
After the 2011 general election, centre-left Labour joined with centre-right Fine Gael as the junior partner in a coalition government with the largest majority in Irish political history.
The coalition was mandated with improving the republic's dire finances just months after the previous government sought an USD 115-billion European Union and International Monetary Fund bailout.
Recent polls had shown Labour voters were unhappy with how the party was performing in government despite Ireland exiting the rescue programme in December.
Fine Gael Prime Minister Enda Kenny said he and Burton had agreed to work closely to fulfil the remainder of the government's term in office, which must end by April 2016.
"I have congratulated Joan Burton today on her election as leader of the Labour Party and confirmed that I have nominated her as Tanaiste (deputy prime minister)," he said in a statement.
"We will meet early next week to discuss the government's key priorities for the coming period, and changes in the composition of the government.
