Merkel, who has been chancellor since 2005, announced in late 2018 that she wouldn’t seek a fifth term. She also stepped down from the CDU leadership.
The decision ends an 11-month leadership limbo in Germany's strongest party after outgoing leader Annegret Kramp-Karrenbauer, who had failed to impose her authority on the party, announced her resignation according to foreign media reports.
A vote on her successor was delayed twice because of the coronavirus pandemic.
Armin Laschet, premier of North Rhine-Westphalia state, defeated two rivals in the party's virtual conference.
He is now in a good position in the race to succeed Angela Merkel when she steps down as German chancellor in September, after 16 years in office
But he faces a changed political landscape following the Covid pandemic.
Armin Laschet, 59, defeated conservative businessman Friedrich Merz in a run-off vote by 521 votes to 466. A third candidate, Norbert Röttgen, was eliminated in the previous round.