Barnaby Joyce has become the 13th leader of the Nationals in a century, following Warren Truss' decision to retire.
Fiona Nash has been elected as deputy. The NSW senator is the first woman to be elected to a senior leadership position in the Nationals.
Mr Joyce was not contested for the leadership. He described his election to the leadership as "an awesome responsibility".
Senator Nash said she was humbled to have been chosen as deputy. "It's an exciting time to be in regional Australia," she said.
Mr Truss said he would clock up 26 years in parliament next month and 40 years in public life as a local government councillor and mayor in regional Queensland.
He recalled his early years as the "youngest national president of Rural Youth, the youngest councillor, youngest mayor".
"But now that I'm numbered amongst the oldest, I think it's time to go," he told parliament on Thursday.
Fellow NSW MP and minister Luke Hartsuyker was considered likely to win the deputy leadership, however Senator Fiona Nash was elected in the ballot with seven candidates.
Opposition Leader Bill Shorten told parliament, in paying tribute to Mr Truss, that Labor looked forward to his successor "with some great interest and no little trepidation".
File image of Fiona Nash speaks during Senate question time at Parliament House. Source: AAP
Mr Joyce described Mr Truss as a politician who had personified decency, self-control, attention to detail, leadership and strength.
Nationals federal president Larry Anthony had said he believed Mr Joyce would take the leadership without a contest, but the new leader would have to "modify his behaviour".
"It is a slightly different role," Mr Anthony said of the leadership.
"But nonetheless those qualities that Barnaby has are actually the qualities that a lot of people want to see, particularly in rural and regional Australia."
Mr Truss, who turns 68 this year, said when he became leader after the coalition's 2007 election loss to Labor the Nationals were dispirited and media reports spoke of the party's demise.
"Nobody wanted the job, including me," he said of the post-election gloom in the party.
"I am pleased to say that now things are different, and everyone wants the job."
Prime Minister Malcolm Turnbull said his cabinet colleague had helped make Australia "more prosperous, more secure (and) provide greater opportunities for our children and grandchildren".
Former prime minister Tony Abbott said the Truss legacy was "a decade of coalition harmony" which saw the steady growth of his party, which now holds 15 lower house seats and has six senators.
Mr Truss told reporters the prime minister had agreed to four Nationals holding cabinet posts, while the party would lose an outer ministry role in the reshuffle.
He said Mr Joyce would have a different style of leadership, but he would be effective.
"As far as I know Barnaby will be the only candidate for the leadership," he said.
"I have every confidence in Barnaby."
The coalition agreement would retain its basic points, he said, but it would have to be renegotiated between the new Nationals leader and Mr Turnbull.
