Leanne Castley has been elected leader of the Canberra Liberals in a party room vote.
Jeremy Hanson was elected deputy leader.
Ms Castley was elected to the leadership five votes to four, while Mr Hanson defeated Mark Parton for the deputy position five votes to four.
"He's a wonderful local member and there's so much that we can do together as a team," Ms Castley said of Mr Hanson.
"And I am leader through to 2028."
Elizabeth Lee, who had led the party for four years, congratulated the pair on social media.
Ms Castley said it had become clear to her that the loss suffered by the Canberra Liberals at this month's election had not been good.
"I believe that it wasn't a win and we haven't gained ground and I'm happy to acknowledge that there are things that we need to learn and we need to be listening. And that starts today," Ms Castley said after the party room meeting.
Ms Castley said there had been a number of reasons that prompted her to drop support for Ms Lee, and unity was now her goal for the party.
"I think it's important to be humble in a loss such as we have just gone through," she said.
Ms Castley said there would be a position for Ms Lee on the Liberals' front bench. Ms Lee said she would not take up that offer.
Mr Hanson said he had been happy to step away from the leadership ballot to support Ms Castley, and that he was humbled to have been approached by her.
"I look forward to working with dedication to support her and support the whole team," he said.
Mr Hanson said he had come to the view the party needed to move forward with a "dynamic new leader" and Ms Castley was a "fantastic person" and "very impressive".
"I think she's someone that can bring not just the Canberra Liberals together, but the whole community together," he said.
"And it became very apparent to me that she was the right person to lead the Canberra Liberals."
Chief Minister Andrew Barr said Labor congratulated Ms Castley and Ms Hanson on their election to leadership positions and acknowledged Ms Lee.
"This leadership group represents a shift to the right for the Canberra Liberals, and highlights the division and conflict in their party room," Mr Barr said.
"The behind-the-scenes machinations of this leadership coup bear an uncanny resemblance to Scott Morrison's ascension to the prime ministership."
Mr Parton, the Liberals' top-performing candidate in Brindabella, confirmed ahead of the party room meeting he would support Ms Lee.
"In the days following the election, I had some conversations with Elizabeth Lee and I pledged to her that I would support her bid to retain the leadership. Did I make that pledge prematurely? Look, I will say that subsequent to making that pledge, we did slip back from 10 seats to nine, but I had still made that pledge," he said in a video posted online.
"And here's the deal, my friend, if I tell you that I'm going to do something, it means that I'm going to [do] it. ... So I will be backing Elizabeth."
Mr Parton said sometimes members of parliament forget their biggest job was to represent the people who voted for them.
Ms Castley emerged on Wednesday evening as a late favourite to take the leadership of the Canberra Liberals, after Mr Hanson's bloc was understood to have thrown its support behind the member for Yerrabi.
Ms Lee, who led the party for four years and to the 2020 election, had been expected to retain the leadership with the support of her moderate colleagues - until late on Wednesday.
Mr Hanson, a former party leader, had announced he would contest the party room ballot shortly after the party's election loss.
But The Canberra Times understands Mr Hanson switched his intentions to support Ms Castley on Wednesday afternoon, as part of an effort to block Ms Lee from retaining the leadership.
Ms Castley on Wednesday morning said she would support Ms Lee if she remained leader ahead of Thursday's party room spill.
"I've told Elizabeth that I'll support her if she's leader and that's all I have to say about that," Ms Castley said at a press conference.
"I believe there is a lot we can change and work on together doing that and that's what I'm looking forward to."
But Ms Castley is understood to have told Ms Lee she could no longer support the incumbent as leader because Ms Lee had sought talks with the ACT Greens after the election.
Ms Castley on Thursday said she told Ms Lee of her intentions about 4pm on Wednesday, and had approached Mr Hanson to seek his support for her to claim the leadership.
Ms Lee on Tuesday confirmed she would seek her colleagues' backing to lead the Canberra Liberals into another term, following the party's seventh straight election loss.
"I'm putting my hand up because I do believe that I'm still the best person to lead the Canberra Liberals, to give us the best chance going into 2028," Ms Lee said.
Ms Castley's move came after Ms Lee had publicly backed the member for Yerrabi to remain as deputy leader. Ms Castley won the position in a snap party room vote when Mr Hanson was removed from the position in late 2023 after months of internal tension.
Ms Lee said feedback from her party room had highlighted the need for stability, which she thought showed a willingness to continue with the same leadership team with "some improvements and changes along the way".
