Rudd won a landslide election victory less than three years ago but support for his government has plummeted in opinion polls since April over a series of unpopular policy moves, and his erstwhile deputy Gillard challenged him to hold a leadership ballot on Wednesday.
On Thursday, Rudd acknowledged that the party's factional power brokers had lost faith in him and did not contest the leadership at a party meeting, leaving Gillard to be elected unopposed.
"I asked my colleagues to make a leadership change because I believed that a good government was losing its way. I was not going to sit idly by," Gillard said on Thursday before being formally sworn in as prime minister by Australia's first woman governor-general, Quentin Bryce, within hours of the party ballot.
"It's with the greatest humility, resolve and enthusiasm that I sought the endorsement of my colleagues," she added.
Since Labor is the majority party in parliament, Gillard's swearing in as prime minister was a formality after securing the party leadership. Wayne Swan was elected -- also unopposed -- as Gillard's deputy and retains his portfolio as treasurer. He will to fly to Canada on Friday for a summit of Group of 20 major economies in Rudd's place.
Gillard has yet to announce any other ministers in her new cabinet.
While offering some praise for the man she ousted, Gillard said the government he led "at times ... went off track", though she admitted she bore a "fair share of responsibility for the Rudd government's record".
She also acknowledged she had "not been elected prime minister by the Australian people" and would "in the coming months... ask the governor-general to call a general election so Australians can exercise their birthright and choose their prime minister".
The governor-general is the representative of Britain's Queen Elizabeth II, also the queen of Australia, and performs official functions such as swearing in the government and calling elections.
Gillard distanced herself from the Rudd government on a number of key policy areas on Thursday, pledging to resurrect the government's failed climate change policy focussed on a carbon trade emissions scheme.
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