Catholic cardinals have chosen Cardinal Jorge Mario Bergoglio of Argentina to be the next pope.
He will be known as Pope Francis I and is the first pope from the Americas.
Heavy red curtains were drawn back as Pope Francis, 76, appeared on the balcony of St Peter's Basicilia to deliver his first speech.
He told the crowds packed into St Peter's Square that it seems his brother cardinals went to the "end of the world" to find a new pope.
Pope Francis called on humanity to set off on what he described as a path of love and fraternity.
He also delivered his first blessing to the world.
White smoke had billowed from the chimney of the Sistine Chapel signalling the cardinals had reached the two thirds majority required to elect a new pope.
Bells rang out from St Peter's Basilica, prompting cheers from the waiting crowd and chants of Habemus Papam - we have a pope.
The decision came at the end of the cardinals' second day of voting on who would replace Benedict XVI, who resigned unexpectedly last month.
The first voting session on Tuesday evening and a session on Wednesday morning had ended with black smoke emerging from the chapel's makeshift chimney, indicating no decision had been reached.
Pope Francis was elected on the fifth vote.
The Vatican says Pope Francis's inaugural mass will be held on 19 March.