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Turnbull topples Abbott to be fifth Aussie PM in eight years

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New Australian Prime Minister Malcolm Turnbull promised to focus on stability and improving a faltering economy as the public woke up on Tuesday to their fourth leader in two years.

The Liberal Party voted in a secret ballot late on Monday to oust Tony Abbott as the leader of the senior party in a ruling conservative coalition in favour of Turnbull, a multi-millionaire former tech entrepreneur who is popular with the electorate

"I'm filled with optimism and we will be setting out in the weeks ahead ...more of those foundations that will ensure our prosperity in the years ahead," Turnbull told reporters as he headed to parliament on Tuesday before being sworn in.

Abbott was deposed barely two years into his three-year term after months of opinion polls that showed his popularity with the public near rock bottom as Australia's $1.5 trillion economy struggles to cope with the end of a once-in-a-century mining boom

Turnbull had previously been unpalatable to his party's right wing because of his progressive views on climate change, same-sex marriage and making Australia a republic.

However, Abbott's dismal performance and over-reliance on slogans to sell his major policies, including a hardline approach to refugees, wore down internal opposition to Turnbull.

Australia to get new PM after Abbott ousted in party vote

Abbott, in his last address as prime minister on Tuesday, pledged to make the leadership transition as smooth as possible but also expressed concern that "a revolving door prime ministership can't be good for our country".

Australia has in recent years been convulsed by backroom machinations and party coups that have shaken public and business confidence in government.

"There will be no wrecking, no undermining, and no sniping," Abbott told reporters.

Turnbull's ascension is seen by many political analysts as restoring stability because he presents a more formidable foe for the opposition Labor Party at elections due in about a year.

"If the election was held yesterday, the opposition would have won. If it was held today they would lose," said Peter Chen, a senior lecturer in government at Sydney University.

"Malcolm Turnbull is much more of a threat to the leader of the opposition than Tony Abbott was," Chen said. "It looks like, unless things really change, the government will get a second term in office."

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There is also continuity in the form of Foreign Minister Julie Bishop, who won the party room vote to retain her additional position as deputy party leader.

However, significant changes are expected when Turnbull, who had been toppled as Liberal Party leader by Abbott in opposition in 2009, unveils his ministry later this week.

Current Treasurer Joe Hockey, who has been battling a backlash against a deeply unpopular budget, and Defence Minister Kevin Andrews, who is overseeing a A$50 billion ($35.70 billion) submarine tender, are both expected to be replaced.

Australian Chamber of Commerce and Industry chief executive Kate Carnell welcomed the promise of more collegiate and co-operative government, urging Turnbull to undertake reforms to boost productivity and competitiveness.

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Australia's revolving door leadership also plagued the Labor Party when it was in power.

Labor's Kevin Rudd, elected prime minister with a strong mandate in 2007, was deposed by his deputy, Julia Gillard, in 2010 amid the same sort of poll numbers that Abbott faced. Gillard was in turn deposed by Rudd ahead of the 2013 elections won by Abbott.

- CNBC contributed to this report.