Hofer's selection comes as his populist Freedom Party tries to repair its credibility in time for national elections. The party is keen on a fresh coalition, despite jinxing its last partnership with the People's Party.
Austria's far-right Freedom Party (FPÖ) on Saturday attempted to brush off the Ibiza video corruption scandal by electing a new moderate leader.
Norbert Hofer secured 98.25% of votes during a poll of members during the party's congress in Graz, the country's second-largest city. His selection comes ahead of national elections on September 29.
In his acceptance speech, the 48-year-old said he wanted the party to be the strongest force in Austrian politics.
"I do not compete as a party leader for a party that is permanently satisfied with second or third place," the former transport minister said.
Hofer replaces Heinz-Christian Strache, who resigned as party leader and Austria's vice-chancellor in May after being allegedly caught on secret video offering public contracts to a Russian businesswoman in return for political support.
The scandal led to the fall of the Austrian government after Chancellor Sebastian Kurz pulled the plug on a 19-month coalition between his center-right People's Party (ÖVP) and the populist FPÖ.
FPÖs friendly face
Hofer, who narrowly lost out to Alexander Van der Bellen to the country's figurehead presidency, has gained a reputation as the party's friendly face.
His election marks a contrast to firebrands Strache and former interior minister Herbert Kickl.
However, many political observers doubt whether he will adopt a more moderate approach, especially as the FPÖ could move into opposition after the election.
"In that case, Hofer will probably also strike hard," political scientist Kathrin Stainer-Hämmerle told Germany's DPA news agency.
Hofer has declared he wants to "put his stamp" on the party and see it in government again in a renewed coalition with the ÖVP.
Familiar election tactics
The far-right party has deployed slick posters that show him with the slogan "loyal to the homeland," while at the same time stepping up its anti-immigration and anti-Islam rhetoric.
Hofer, who wrote the FPÖ's election manifesto, also hailed his "long-term friendship" with Hungary's nationalist Prime Minister Viktor Orban during a visit to Budapest this week.
His party has quickly regained much of the support lost following the Ibiza scandal after its leaders claimed the hidden camera footage, from 2017, was a setup.
However, with less than two weeks until the election, polls suggest as many as a third of voters remain undecided.
An ÖVP coalition with the second-placed Social Democrats remains unlikely, meaning that the fresh-faced far-right party could, once again, become junior alliance partners.
Alternatively, the ÖVP may choose to partner with the Liberals and/or Greens.
mm/rc (AFP, dpa)