Australia has a new prime minister after its leader Tony Abbott lost a leadership challenge.

Malcolm Turnbull defeated Mr Abbott 54-44 in a Liberal Party ballot and will become the country's 29th prime minister.

Mr Abbott had faced months of bad opinion polls and growing discontent in his party.

Polling consistently showed communications minister Mr Turnbull, a multimillionaire former technology entrepreneur, to be the preferred prime minister.

Mr Abbott had only just survived a leadership challenge in February, weakened by weeks of infighting and criticism about how the government was handling the end of a massive mining boom.

He also faced a torrent of criticism for awarding an Australian knighthood to Britain's Prince Philip in January.

Mr Turnbull's support for gay marriage, carbon trading schemes and an Australian republic have made him unpopular with the party's right-wing faction.

Mr Abbott toppled Mr Turnbull as the Liberal Party leader in 2009.

Julie Bishop will remain deputy leader of the Liberal Party.

The last Australian prime minister to serve a full term was John Howard, who was in power for almost 12 years until 2007.

Labour leaders Julia Gillard and Kevin Rudd were both ousted by their parties before the end of their terms.

Matt Siegel, senior correspondent for Reuters based in Australia, spoke with Newstalk Lunchtime and outlined the factors behind the change.