Foreign Secretary Truss comfortably beat her rival, former finance minister Rishi Sunak, by about 57 to 43 percent after a grueling summer-long contest decided by just over 170,000 Conservative members -- a tiny sliver of Britain's electorate.
In a short victory speech at the announcement in a central London convention hall, Truss said it was an "honour" to be elected after undergoing "one of the longest job interviews in history".
"I campaigned as a Conservative, and I will govern as a Conservative," she said, touting Tory values of low taxes and personal responsibility.
Truss vowed a "bold plan" to address tax cuts and the energy crisis.
Truss, 47, will be only the UK's third female prime minister following Theresa May and Margaret Thatcher.
She will formally take office on Tuesday, after Johnson tenders his resignation to Queen Elizabeth II.
The Tory winner faces "the worst in-tray for a new prime minister since Thatcher", The Sunday Times wrote.
Millions say that with energy bills set to rise by 80 percent from October -- and even higher from January -- they face a painful choice between eating and heating this winter, according to surveys.
The Times and Daily Telegraph newspapers reported Monday that Truss was considering freezing energy bills for consumers, with the government reimbursing suppliers.
But polls show public support for an early general election, and the Conservatives face a growing challenge to retain their 12-year grip on power with the opposition Labour party riding high.
Truss became foreign minister a year ago after holding a series of ministerial posts in departments including education, international trade and justice.