Officials have said that Australia's Labor Party has elected Julia Gillard as its leader, ousting Prime Minister Kevin Rudd weeks before a federal election.

The Age newspaper has reported that Gillard was unopposed in the leadership election and is to be sworn in Friday morning as Australia's first woman prime minister, the Australian Broadcasting Corp. reported. Gillard, a former deputy prime minister who demanded a vote on the party leadership, will decide when to lead her party into the next general election.

Rudd, whose popularity fell dramatically in recent months, is the first Labor prime minister to fail to finish a first term. He had told Australians Thursday night he would remain in office.

The Age further said that Rudd made "a very gracious speech" and stood aside to avoid a humiliating defeat as the party met to pick its new leader.

Party sources said Rudd was reduced to tears as he addressed his colleagues and announced his decision to stand aside as leader.

It was also reported by the Age that just a year ago, Rudd rivaled Bob Hawke as Australia's most popular leader. He joins Hawke, Australia's longest serving Labor prime minister, who served from 1983 to 1991, as the only other Labor prime minister dumped by his own party.

Analysts have said that a series of policy failures, poor showings in polls and the decision to go to war with the mining industry over taxes all led to Rudd losing support from his Labor colleagues.

According to reports of ABC, Treasurer Wayne Swan will be the new deputy prime minister. (With Inputs from Agencies)