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The first Aboriginal to head a government in Australia took office on Thursday as chief minister of the Northern Territory, after staging a backroom coup.
Adam Giles won a controversial internal party vote on Wednesday, ousting his predecessor who was in Japan at the time.
Prime Minister Julia Gillard hailed Giles' victory, "whatever the circumstances".
"This is a moment in history for indigenous Australians," Gillard told parliament in Canberra.
Opposition leader Tony Abbott echoed the sentiment, noting "tumultuous" times in the territory.
"Still, in a very important sense yesterday was a very auspicious day for our nation," he added.
At a meeting in Darwin on Wednesday Giles claimed the top job with 11 votes of the Country Liberal Party's (CLP) 16 MPs.
"I am truly humbled to be asked by my colleagues to ... undertake this role," 40-year-old Giles told ABC radio ahead of his swearing-in.
"It is a significant challenge to take the leadership of the Northern Territory in the times we are in at the moment."
Outgoing chief minister Terry Mills had already fought off two leadership challenges in the past month after the conservative CLP, a party local to NT, performed badly in a recent by-election.
Mills' NT government had pursued an unpopular programme of spending cuts and price rises that saw power costs rise 30 percent and water 40 percent.
Federal opposition spokesman on indigenous affairs, Nigel Scullion, called the appointment an "historic move".
"Aboriginal people all over Australia can rightly feel proud on this day," he said.
It was only last month that Australian lawmakers formally recognised indigenous peoples as the country's first inhabitants, five years after an historic apology to Aborigines for past wrongs.
Aborigines are the most disadvantaged Australians, with indigenous children twice as likely to die before their fifth birthday as other children.
They are believed to have numbered around one million at the time of British settlement in 1788, but there are now just 470,000 out of a total population of 22 million in Australia.