The former New South Wales Liberal Party president has been preselected to fill the Senate seat left vacant after the death of Jim Molan earlier this year.
After the vote at a party meeting on Saturday, Maria Kovacic, who is a member of the moderate faction, won 266-243.
She defeated former NSW cabinet minister and Bega MP, Andrew Constance.
The Western Sydney businesswoman said it was an honour and privilege to be selected by members, and looked forward to "holding Labor to account".
"I want to make it very clear that I'm here to fight for our community," she said.
"I'm here to fight for Australians that are suffering in term of the cost-of-living pressures and inflation.
"And look forward to holding Labor to account on their broken promises and the bad decisions."
When asked if she was glad a woman had been selected, she responded: "I certainly am."
It was Ms Kovacic's second tilt at joining federal parliament after she failed to win the seat of Parramatta at the federal election.
In April of this year, she resigned from her role as state party president to run for the Senate vacancy, and was considered to be among the frontrunners at the time.
Fellow moderate, Mr Constance was also considered a strong contender.
Finally being elected, she said was "really special".
"I'm really grateful to our membership for putting their trust in me and for selecting me to represent them in Canberra."
As the co-founder of Western Sydney Women and Western Sydney Executive Women and member of the Committee for Western Sydney, Ms Kovacic has a longstanding relationship with communities in the region.
Deputy Leader of the Opposition Sussan Ley welcomed the result, calling Ms Kovacic a "formidable woman", saying her experience was a good addition to the team at the federal level.
"The only way we can address — and rectify — the gender imbalance in our parliamentary ranks is by preselecting more women," Ms Ley said.
"And I am thrilled that my home division, the New South Wales branch, has chosen to do that today.
"I am looking forward to working with Maria to support local communities across the state."
Senator Molan died in January, two years after being diagnosed with an aggressive form of cancer. He was aged 72.
Ms Kovacic today paid tribute to the late senator.
"What an important legacy he has left and incredibly big shoes to fill, and I will do my best to do that."
