Mr Davies beat rival Nick Ramsay with 53.1% of the votes in a party election which had a 49% turnout.
The South Wales Central assembly member urged his party to offer a "real alternative to the failed Labour ideology in Wales".
Prime Minister David Cameron said the Tories' 14-strong group must offer a "strong Conservative voice for Wales."
The contest was called after former Tory group leader Nick Bourne lost his seat in May's assembly election.
The result was declared at 1445 BST, nearly two hours later than expected, and Mr Davies spoke to the Prime Minister shortly after.
Mr Cameron said: "I want to congratulate Andrew on his election as the leader of our party in the Welsh Assembly.
"Under Labour, Wales has become the poorest part of the UK, its education system is failing a generation and now Labour are making cuts of ?1billion to the NHS.
"We must now offer a strong Conservative voice for Wales and I look forward to working closely with Andrew to deliver this and realise our strong ambitions for Wales."
Mr Davies paid tribute to both Monmouth AM Mr Ramsay, who won 46.7% of the vote, and Mr Bourne in his acceptance speech at the Swalec Stadium in Cardiff.
Mr Davies said he had been handed a "great responsibility".
"Wales runs through my DNA," he said.
"I'm a proud Welshman and a proud unionist and I feel bitterly disappointed when I look at the league tables on health, economic performance and education, and we see Wales propping those tables up, rather than leading from the top."
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We will be inspiring the people of Wales to reach for those heights that I know our communities can go for”End Quote Andrew RT Davies AM Newly-elected Conseravtive leader in the assembly He added: "Above all, we will be inspiring the people of Wales to reach for those heights that I know our communities can go for."
Mr Davies praised the leadership of Mr Bourne, thanked his family for their support and paid tribute to Mr Ramsay.
"Ideologically there's not much difference between us and that stands us in good stead as a party," he said.
Offering his congratulations, Mr Ramsay said the new leader had his full support.
"This is now about taking the fight to Labour and taking the fight to Carwyn (Jones, First Minister).
"Let's fight for the next few years in advance of those assembly elections."
He added that the leadership election had gone "right down to the wire".
Welsh Secretary Cheryl Gillan congratulated both Andrew Davies and Nick Ramsay on how they conducted their campaigns.
'Weight of responsibility'"This result marks the start of a new chapter for the Welsh Conservatives in the assembly and I look forward to working with Andrew in the years ahead," she said.
Continue reading the main story Born Cowbridge, Vale of Glamorgan 1968, aged 43Married with four childrenEducated at Llanfair Primary School and St John'sBecame a partner in the family farm and is former Welsh delegate on the NFU councilJoined the Welsh Conservative Party in 1997, stood general election candidate in 2001 and 2005First election to assembly in 2007Served as party spokesman on health, education and transportHobbies include swimming, farming and spending time with his family"I know he realises the weight of responsibility he carries in holding the Labour-led Welsh Government to account, and in ensuring it pursues the right course towards building a stronger economy, providing better services, and offering greater opportunities for everyone in Wales."There is much to be done. And by working with colleagues at Westminster, in Europe and in local government we can all ensure further success for our party in Wales."
Mr Davies has been an AM since 2007 and sparked speculation about his ambitions when he suddenly stood down as the party's shadow health minister in November 2010.
The assembly's Liberal Democrat leader, Kirsty Williams, said: "I'd like to congratulate Andrew on his success on being elected leader of the Conservative group in the National Assembly.
"I look forward to working with him and other party leaders on furthering devolution for the people of Wales."
Plaid Cymru leader Ieuan Wyn Jones also congratulated Mr Davies, adding: "With many significant challenges ahead for Wales, particularly over ensuring fair funding and further constitutional advances for our nation, I sincerely hope that he will use his new role to try to influence the Conservative party leadership in Westminster to act in the best interests of Wales."
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