Multi-millionaire former banker Malcolm Turnbull was to be sworn in as Prime Minister of Australia on Tuesday, just hours after masterminding a coup against conservative leader Tony Abbott and pledging a new style of leadership.

Turnbull will be the country's fourth prime minister in just over two years, part of a recent Australian political tradition of swiftly removing failing leaders.

"This is the most exciting time to be an Australian," an upbeat Turnbull told reporters in the capital Canberra.

"This is a turn of events I did not expect, I have to tell you, but it's one that I'm privileged to undertake, and one that I'm certainly up to."

After being sworn in by the Queen's representative in Australia, Governor-General Peter Cosgrove, Turnbull is expected to hold his first cabinet session.

He has pledged to run a consultative government, in contrast to Abbott's divisive rule, and showcase a smarter style of leadership in a complex world.

"My firm belief is that to be a successful leader in 2015, perhaps at any time, you have to be able to bring people with you by respecting their intelligence in the manner you explain things," he said Monday. "We need advocacy, not slogans."

Abbott has not addressed the media since his sudden, late night toppling by his long-time Liberal Party colleague and rival, who served as communications minister before making the challenge.

The outgoing leader won power in a general election victory in September 2013 but his first budget, with its harsh cuts to health and education, proved highly unpopular.

He survived a leadership challenge in February after poor polling and a serious of gaffes ignited a backbench revolt.

But since then Abbott has failed to turn around the polls, bolster the economy or stop damaging internal leaks and lost the support of the majority of his party.

Turnbull said Monday as he announced his move that without change at the top, the conservative coalition government was doomed to lose power in elections expected to be held within a year.

"The prime minister has not been capable of providing the economic leadership our nation needs," he declared.


New blood

The new leader, with strong support from influential foreign minister Julie Bishop who the party re-elected deputy leader with a strong 70-30 vote in her favour, is expected to shake up the cabinet this week.

He is thought likely to sweep out traditional conservatives and bring in younger blood and more women.

After his 54-44 victory late Monday, Turnbull, whose successful career also included stints as a barrister and an entrepreneur, ruled out an early national election to cement his leadership.

Turnbull -- who was ousted by Abbott as Liberal Party leader in 2009 over his support of the previous Labor government's carbon emissions trading scheme -- also said there would be no change to Australia's climate policy.

With its heavy use of coal-fired power and relatively small population of 23 million, Australia is considered one of the world's worst per capita greenhouse gas polluters.

Its targets for reducing emissions over the next 15 years by 2030 have been criticised as well below the level required by the government's own advisory body, the Climate Change Authority.

Nick Economou, senior lecturer in politics at Monash University in Melbourne, said it was too early to say whether Turnbull would be able to charm the electorate and turn around the government's political fortunes.

"A lot depends on the economic argument he intends to make," he said.

"I think there is a real danger for Turnbull here because... the problem in the Australian economy is the mining boom is over, government expenditure is outstripping revenue raising and he will face the same problem that Tony Abbott faced."

Australian media splashed the dramatic news with headlines to match.

"Smiling assassin" said Sydney's Daily Telegraph beneath a picture of a beaming Turnbull.

The Australian front-paged "Turnbull's triumph" while The Sydney Morning Herald ran with "The Coup".

The Australian Financial Review warned the Liberal Party was ripping itself apart "amid scenes of carnage".