Ms Allan ran for leader of the Victorian Labor Party at a caucus meeting on Wednesday after Daniel Andrews' shock resignation less than 24 hours before.
Public Transport Minister Ben Carroll was chosen as deputy.
"It is such a deep honour and privilege to be in the position to be heading to Government House and to be sworn in as premier of Victoria," Ms Allan told reporters.
"Twenty-four years ago, almost to the day when I walked into this place as a much younger woman from regional Victoria, I never expected to have this length of service or indeed to be able to have had the honour and privilege of serving the Victorian community in various ministerial roles.
"I pledge to continue to work incredibly hard as I have done each and every day."
The Bendigo East MP will be Victoria's second female leader and the first Labor premier from regional Victoria in almost 100 years.
Ms Allan became the youngest woman elected to Victoria's parliament in 1999 at the age of 25, and the state's youngest minister in history in 2002 at the age of 29.
She took over as Mr Andrews' deputy and presumed successor in June 2022 and most recently served as minister for transport infrastructure and the suburban rail loop project.
She was also charged with delivering the now-cancelled 2026 Commonwealth Games until the portfolio was abolished.
Wednesday's caucus meeting started late after Mr Carroll threw his hat in the ring for the leadership.
But Ms Allan emerged from the meeting with the numbers to become premier, avoiding the matter going to a vote by membership.
"All positions have been elected unopposed," Box Hill MP and the party's returning officer Paul Hamer told reporters.
"The new premier is Jacinta Allan, the deputy premier is Ben Carroll."
The new ministerial cabinet spot left by Mr Andrews' departure will be filled by Eltham MP Vicki Ward.
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