Defeated candidate David Davis says the Conservatives have welcomed the next prime minister by electing David Cameron as the party's new leader.
Mr Davis, who was beaten by 134,446 votes to 64,398 in a ballot of party members, said the leadership campaign had shown the Tories at their best.
"It has shown our party as democratic, intelligent, civilised, thoughtful, mature," he told reporters.
Mr Cameron told Mr Davis he would be a "vital part of the team in the future".
'Party of principle'
The two men were speaking after Sir Michael Spicer, chairman of the Tory backbench 1922 Committee, announced the result at the Royal Academy in London on Tuesday afternoon.
Mr Davis thanked his "brilliant" campaign team, and said: "The contest has not just been a contest for the leadership of the Conservative Party, it's also been a preamble to us winning the next general election."
The Tories had been shown as "a party of principles, a party of ideas - in short, a party fit for government", he said.
"So ladies and gentlemen, when I ask you to welcome the new leader of the Tory party, I am also asking you to welcome the next Conservative prime minister - David Cameron."
Mr Cameron thanked Mr Davis and the other leadership candidates - ex-chancellor Kenneth Clarke and shadow foreign secretary Liam Fox - for the "very civilised, decent and reasonable way" the campaign was conducted.
"It has shown talent, it has shown ideas - above all it has shown optimism," he said.
The result brings to a close an intense seven month campaign which saw Mr Clarke and Dr Fox, being voted out of the race by Tory MPs.
The final vote was a postal ballot of the 253,600 Tory members. Some 198,844 valid ballots were cast.
Mr Clarke said he was "delighted" by the result, saying he had voted for Mr Cameron.
The Tories could be very optimistic, especially as Gordon Brown's reputation was looking frayed, he told BBC News 24.
Mr Davis, MP for Haltemprice and Howden, and shadow home secretary, started out as the bookies' favourite, but a lacklustre speech at the party's annual conference saw his campaign lose momentum.
Over subsequent weeks Mr Cameron continued to become a firmer and firmer favourite, despite Mr Davis having generally thought to have bettered him when the two men went head-to-head at BBC's Question Time.
Just an hour after his election, Mr Cameron began selecting MPs to join his shadow cabinet with the appointment of Patrick McLoughlin as his new chief whip. He takes over the post from David Maclean who has decided to return to the backbenches.
Reacting to news of the election result, former Tory Prime Minister Baroness Thatcher said Mr Cameron had won with a "clear result" and she "wishes him well".
Her successor Sir John Major, said: "If the party unites behind David Cameron, and offers him the support he deserves, I have no doubt the Conservative Party will win the next election."
George Osborne, Mr Cameron's campaign manager and close friend, said the new Tory leader would "offer the country an alternative" based on passion and principle.
"He has stuck to his message of change and he has won a huge mandate from the Conservative Party to change our party," the shadow chancellor said.
Ex-Cabinet minister Michael Portillo, who is now a writer and broadcaster, said the principle behind the election was "would the party change".
'All Cameroons now'
"David Cameron was the change candidate and David Davis was the no change candidate," said Mr Portillo.
He urged Mr Cameron to fill his shadow cabinet "with people who agree with him".
Shadow Commons leader Chris Grayling said Mr Cameron would "set a very different tone for the party".
Tory MP Julie Kirkbride, who was a David Davis supporter, said: "I think David Cameron has won the campaign and we are all Cameroons now.
"He has shown huge qualities of leadership - we are all very excited."