The Cardinal of Buenos Aires Jorge Mario Bergoglio was tonight named as the new pope - the first from Latin America.
The 76-year-old, who becomes Pope Francis, was regarded as a surprise choice and is the first pope to be chosen from outside Europe for more than a millennium.
His historic election was signalled by white smoke billowing from the conclave of cardinals meeting in the Sistine Chapel.
Thousands gathered at the Vatican, cheering and applauding as they waited for Pope Francis, the son of an immigrant railway worker, to emerge on the balcony facing St Peter's Square.
The new head of the church's 1.2 billion Catholics, Latin America's first pope, appeared just over an hour after the fifth ballot ended with a smile and a simple "Good evening".
Addressing the joyous masses gathered in the rain, he said "the world should set off on a path of love and fraternity". He added: "I would like to thank you for your welcome, the community of Rome, it's brotherhood, I thank you. Above all, I would like to pray for Pope Benedict XVI."
World leaders applauded the election and US president Barack Obama offered "warm wishes" and said the appointment spoke to the strength and vitality of the Americas.
"On behalf of the American people, Michelle and I offer our warm wishes to His Holiness Pope Francis," Mr Obama said. "As a champion of the poor and the most vulnerable among us, he carries forth the message of love and compassion that has inspired the world for more than 2,000 years."
Prime Minister David Cameron and French president Francois Hollande also issued statements of congratulations. Today was "a momentous day for the 1.2 billion Catholics around the world". Mr Cameron said.
Pope Francis succeeds Pope Benedict XVI, whose resignation threw the church into turmoil and exposed deep divisions among cardinals tasked with finding a replacement to clean up Vatican bureaucracy embroiled in recent scandals. He is the 266th and is tasked with reviving Catholicism in a time of growing secularism.