Avowed Socialist and anti-austerity advocate Jeremy Corbyn won 59.5 percent of the ballots cast, or 251, 417 votes, to take over the leadership position, the party announced at a special conference in London on Saturday.
He defeated three more centrist candidates. His closest rival, Andy Burnham, scored 19 percent. In all, party members cast 422,664 votes.
More 'decent society'
Addressing the party after the result, Corbyn said he wanted Labour to strive for a diverse, "decent and better society" open to all.
Corbyn, who has often voted against past party decisions, scored during the leadership campaign on a message of promising to increase state-funded investments and re-nationalizing parts of Britain's economy, including railways.
The defeated trio - Andy Burnham, Yvetter Cooper and Liz Kendall - were widely regarded as advocates of policies of former Labour Premier Tony Blair.
Labour out of power?
Critics, including Blair, had argued that Corbyn's socialist ideas and aversion to Britain's membership of the Western military alliance NATO, would alienate moderate voters and keep Labour out of power.
Corbyn only entered the contest at a late stage, saying he wanted to ensure wider debate among candidates.
Saturday's result means that he will debate head-to-head in the House of Commons every week with conservative Prime Minister David Cameron.
Advocate for the poor
Corbyn grew up in a political family. His parents met as activists during the Spanish Civil War. He worked for trade unions before being elected to the Commons in 1983.
Corbyn, who has never held major office but instead remained a serial backbench rebel, opposed the now deeply unpopular 2003 US-led invasion of Iraq that was advocated by Blair while in office.
Corbyn also opposes Cameron's austerity measures which have seen deep cuts to welfare and has in the past said he believes "we can learn a great deal" from Karl Marx.
ipj/sms (AFP, AP, Reuters)