"I am so happy and proud," Sjöstedt said after the results came in.
Sjöstedt won over other candidate Rosanna Dinamarca with 179 votes to 39.
In a speech he promised to be a leader to Dinamarca's supporters as well.
"I will listen and work together with you. Together we can build a stronger Left Party. I am looking forward to winning the election with you," he said.
Sjöstedt, ranked by many as the favourite, has recently been slightly disappointed to see a decline in support. However, he never believed it would affect the decision on the day, and it turned out he was right.
Ulla Andersson, who pulled out of the campaign on Thursday when the party congress voted against the proposition of the party having two leaders - a decision reached only a few days ago.
A split leadership, following that of the Green Party, had been discussed for some time but has been turned down previously, both in 2006 and 2010.
The decision came as a disappointment to more than Andersson.
“I would have liked to see a split leadership and have been in favour of that from the beginning. But the party congress has made its point and there is nothing else to say about it,” said Sjöstedt.
He also said that should he win, he would make sure that more than one person will be at the front of the party.
“And one of the people who should be at the fore is of course Ulla Andersson,” he told news agency TT.
Dinamarca said prior to the vote that she believes it is important that the party, with its feminist values, has a woman at the forefront and thinks it was a shame Andersson has pulled out of the competition.
While she did not want to speculate about the chances of her winning at the time she said she believed that it was important she remained as a candidate, as the only woman left in the race, according to TT.
After Sjöstedt's win, Dinamarca was quick to express her support for the new party leader, whom she said was an "excellent representative for the party".
Despite losing by quite a significant margin of votes, she is not sad she ran for the post.
"All through this process I have done what has felt right in my heart and I still am," she told TT.
Prime minister Fredrik Reinfeldt, the leader of the Moderates, told TT that he welcomed the newest party leader of the opposition.
"I want to congratulate Jonas Sjöstedt and welcome him as a party leader and colleague. I look forward to meeting with him and discussing both politics and government alternatives in the future," he wrote to TT.