Jeremy Hunt will face Boris Johnson in the race to be the next Tory leader and PM, after Michael Gove was eliminated in the final ballot of the party’s MPs.
Environment Secretary Mr Gove was supported by 75 MPs – just two votes short of Mr Hunt’s 77.
Mr Johnson, who was backed by 160 Conservative MPs, said he was looking forward to “getting out across the UK” and to set out his Brexit plan.
He and Mr Hunt will now be put to a vote of around 160,000 party members.
The winner will be announced in the week of 22 July.
All 313 Conservative MPs voted – with one spoiled ballot recorded.
Mr Johnson’s victory had been widely expected, but Mr Gove and Foreign Secretary Mr Hunt have been engaged for several days in a close fight for second place. In the previous ballot, earlier on Thursday, Mr Gove overtook his rival, only to see his lead reversed in the final MPs’ vote.
Before the final vote, a source close to Mr Hunt warned against reigniting the “personal psychodrama” between Mr Gove and Mr Johnson – who spearheaded the Vote Leave campaign together in 2016, but fell out after Mr Gove abandoned Mr Johnson’s previous leadership bid to launch his own.
Following the result of the final ballot, Mr Gove congratulated his rivals and said he was “naturally disappointed but so proud of the campaign we ran”.
Former Foreign Secretary Mr Johnson said he was “deeply honoured” to have gained the backing of more than half of all Tory MPs.
Meanwhile, Mr Hunt, acknowledged Mr Johnson as frontrunner to become party leader and prime minister, tweeting: “I’m the underdog but in politics surprises happen as they did today.”
He went on to praise Mr Gove as one of the “brightest stars in the Conservative team”.
Mr Johnson and Mr Hunt will now take part in hustings in front of Conservative Party members around the country, before the votes are counted, with the final result expected to be announced at the end of July.
They will also take part in a head-to-head debate on ITV on 9 July.
Labour’s national campaigns co-ordinator Andrew Gwynne said: “What a choice: the man who broke the NHS or the man who wants to sell it to Donald Trump.
“A handful of unrepresentative Conservative members should not be choosing our next prime minister. People should decide through a general election.”
The ballot of MPs earlier on Thursday saw Home Secretary Sajid Javid eliminated from the contest.