Turnbull clung to the top job right to the last minute, as challenger Peter Dutton fronted up to his office with the 43 signatures he required to force the meeting and the ballot.
The party met at 12:20 and within 20 minutes and 45 - 40 votes Morrison took the leadership of the Liberal party from Dutton and becomes Australia's 30th Prime Minister.
Julie Bishop was eliminated in the first round of votes.
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Turnbull lost the leadership of his party after the second spill against him within four days.
The former PM now has to decide whether he will quit politics, and if he does, this will trigger a by-election for his seat of Wentworth. If he does this will cost the new PM, Morrison, the one-seat majority in the lower house and in turn could force him to call an early election.
Josh Frydenberg has been elected at the deputy leader of the party.
Dutton has declared his 'absolute loyalty' to Morrison.