She told 300 cheering supporters that it's time to sweep away a tired Progressive Conservative government shot through with rot and scandal.
"Politics should be about more than nervously promising to clean up the mess you've made," said Notley in her acceptance speech at the Sutton Place Hotel in Edmonton.
"It should be about more than issue management. It should be about more than efforts to distract people from things that matter.
"Politics should be about hope. It should be about optimism. And it should be about the wherewithal to build something better."
Notley, 50, takes over a party that her father Grant Notley helped form in 1962 and kept alive after he was elected leader in 1968.
She defeated Edmonton-Calder MLA David Eggen and labour leader Rod Loyola in voting.
There were 3,589 votes cast.
Eggen took 28 per cent and Loyala two per per cent.
Notley said her immediate goals are to continue the fight in four byelections — three in Calgary and one in Edmonton — with voters going to the polls on Oct. 27.
After that, the plan is to grow the party outside of its traditional base in Edmonton, she said.
"Ultimately, we want to position ourselves to be government, whether that's after 2016 or whether that's after 2020 or somewhere in between.
"We aren't simply focused on being the conscience of the legislature.
"We are focused on changing the government of this province."
Notley replaces Brian Mason, who announced this spring he was leaving the job after a decade at the helm.
Mason has said he plans to remain on as the MLA for Edmonton-Highlands-Norwood, but has yet to decide if he'll run in the next general election, slated for the spring of 2016.
For years Notley's father was the lone NDP member in the legislature, pursuing social justice issues that didn't translate into votes but brought provincewide acclaim and respect.
He didn't live to see the party's breakthrough, when it captured 16 seats in 1986.
Notley died in a plane crash in northern Alberta while heading home from Edmonton on a snowy night on Oct. 19, 1984.
Rachel Notley was just 20.
What advice would your father have for you today? Rachel Notley was asked by reporters.
"I just recently said he'd be surprised that my speech was so short. Back in the day they used to go on for hours," she joked.
"I think what he would say is that what I need to do and what we need to continue to do as a party is speak with integrity, with intellectual honesty about the issues that matter most to regular Albertans to make sure that the prosperity and the wealth that we have in this province is shared amongst everybody.
"If we can't do that effectively, then there's really nothing to celebrate in terms of the wealth and prosperity that is created here."
The triumph of 1986 has proven to be the apex of the NDP to date.
The party receded quickly thereafter, bouncing from no seats in the legislature to two seats, or four seats ever since.
In the last election the NDP fared well in Edmonton, winning four seats, up from two in 2008.
But its share of the popular vote was under 10 per cent and in Calgary and the rural regions, the New Democrats were a non-factor.
Mason has said the reason he stepped down was to bring in a fresh face to try to make the breakthrough that has so long eluded the party for two decades.
Mason says disillusionment with the broken promises and self-indulgent spending of the Alison Redford era has progressive voters looking for alternatives to the Progressive Conservatives.
He said Notley is the person to take them there.
"She's developed into an articulate and passionate politician, a parliamentarian, and a very effective communicator," said Mason.
"I think our party is going to go from better to great."