The 67-year-old train lover beat arch-nationalist Sanae Takaichi -- who would have been the country's first-ever woman leader -- 215 votes to 194 in a run-off.

After his victory was announced at the Liberal Democratic Party (LDP) headquarters in Tokyo, Ishiba smiled and took off his glasses to wipe his teary eyes, and bowed repeatedly as his associates congratulated him.

"I will do my utmost to believe in the people, to speak the truth with courage and sincerity, and to make this country a safe and secure place where everyone can live with a smile on their face once again," he said in a short speech.

Ishiba had come close to the top job before, including in 2012 when he lost to nationalist Shinzo Abe, Japan's longest-serving leader who was later assassinated.

The conservative party has governed almost uninterrupted for decades and holds a majority, meaning Ishiba will be elected premier by parliament on Tuesday.

The military model-maker with an affinity for 1970s pop idols says his experience tackling tough issues, such as agriculture reforms, makes him qualified for the job.

- Yen surges -

As prime minister, he will need to face down regional security threats, from an increasingly assertive China and its deepening ties with Russia to North Korea's banned missile tests.

Ishiba's push to boost the military and call for the creation of an Asian NATO could rile Beijing, but he is careful with his words concerning China.

Following the result, Beijing's foreign ministry spokesman said the country wants to improve ties with Japan, because "the long-term, sound and steady development of China-Japan relations serves the fundamental interests of the two peoples".

At home, Ishiba will be tasked with breathing life into the economy, as the central bank moves away from decades of monetary easing that has slashed the value of the yen.

The Japanese currency surged after the result on Friday, firming to 142.94 against the dollar from 146.49 yen when the head-to-head between Ishiba and Takaichi was announced.

Ishiba supports the Bank of Japan's exit from its unorthodox monetary easing policies and his victory "will almost certainly be welcome news for policymakers" there, Capital Economics said.

He has also pledged to revitalise rural regions and proposes creating a government agency for disaster prevention.

In the first round of voting, a record nine candidates had been in the running after the LDP's long-powerful factions disbanded earlier this year over a funding scandal.

Takaichi, the economic security minister, is a vocal nationalist popular with the LDP's conservative wing. The 63-year-old was close to assassinated ex-premier Abe, whose supporters are still powerful.

In third place behind Ishiba and Takaichi was former environment minister Shinjiro Koizumi, a keen surfer whose father was prime minister in the 2000s.

- 'Concerned about China' -

LDP leaders are in office for three years and can serve up to three straight terms. Unpopular Prime Minister Fumio Kishida did not run for re-election.

On the streets of Tokyo, 72-year-old retiree Yasumi Fujino told AFP she was "concerned about China" and hoped "the next person will focus on diplomacy".

Yuji Ikeda, also 72, said "I understand that the times call for defence spending with the thing about Russia's plane and China and all that".

"But I feel we spend too much on national defence now. I am interested in what the next person would do in terms of policy for seniors."

The LDP has governed Japan almost uninterrupted for decades, with the main opposition parties rarely seen as viable alternatives.

During his term, Kishida has taken steps to double Japan's defence spending, opening the door for military exports as the LDP seeks to revise the pacifist post-war constitution.

He welcomed Ukrainian President Volodymyr Zelensky to a G7 summit in Hiroshima and has strengthened Japan's often testy ties with its neighbour South Korea.

But his rule was also tarnished by scandals, voter anger over rising prices and sliding poll ratings.