Shigeru Ishiba's coalition suffered a catastrophic defeat in October when his ruling party LDP and coalition party Komeito lost their majority in the parliament's lower house.
However, the block is still the largest in the lower house, which has 465 seats, but the minority government Ishiba is now going to lead will likely need to compromise to get its policies through. He has, however, said he is willing to cooperate with additional coalition partners to increase stability and facilitate the work.
Shigeru Ishiba received 221 votes in Monday's ballot. 160 of the votes went to Yoshihiko Noda, who leads the opposition party Constitutional Democratic Party. 84 votes were cast for other candidates.
LDP leader and Prime Minister Shigeru Ishiba took office on October 1 and announced new elections after the party's popularity had declined as a result of several corruption scandals during the previous Prime Minister Fumio Kishida.
Later on Monday, the Prime Minister is expected to announce his new government, which will need to be approved by the Emperor.