Julia Gillard is Australia's first female Prime Minister

Julia Gillard has become Australia's first woman prime minister after Kevin Rudd stood down from the position during a Labor Party leadership spill.

Ms Gillard has been elected unopposed to the position and Wayne Swan will become deputy prime minister.

The spill came after a newspaper report claiming Mr Rudd had instructed his chief of staff Alister Jordan to ring around the caucus to see whether MPs were still behind him.

Ms Gillard was reportedly furious at Mr Rudd's actions and is believed to have told her colleagues that Mr Jordan's sounding out of MPs was disrespectful and disloyal.

At every press conference in recent weeks Ms Gillard reiterated her support of Mr Rudd and last month said there was more chance she would line up at full forward for AFL team the Western Bulldogs than topple the PM.

However, discussions to unseat Kevin Rudd started tentatively about a fortnight ago.

NSW Labor powerbroker Mark Arbib despatched an emissary to see Victorian Senator David Feeney in Melbourne to sound out his thoughts about Julia Gillard as leader.

The discussions started within the Labor Right to swing behind Ms Gillard of the Left.

They thought the Prime Minister had become a liability to Labor's re-election strategy.

The Rudd brand had gone toxic in Western Australia and Queensland and the polls showed immense damage to Labor, with the Nielsen poll showing the party had fallen to a 33 per cent primary vote.

Last night Mr Rudd said he was elected by the people of Australia as prime minister of Australia.

"I was elected to do a job," he said.

After Mr Rudd's 2007 election victory, Ms Gillard was appointed Deputy Prime Minister, Minister for Employment and Workplace Relations and Education Minister, leading to her being dubbed the "minister for everything".

She is credited for putting an end to the infamous Australian workplace agreements under the former Coalition government's WorkChoices laws.

But Ms Gillard has also faced criticism over the Rudd Government's Building the Education Revolution schools building program, with allegations that contractors were seriously overcharging schools for work done and that some projects were wasteful and unnecessary.

She also came under fire for the Government's My School website, which many teachers and principals said failed to give an accurate indication of schools' performances.

Gallery: Gillard's rise to leadership