Julie Bishop, Australia's Minister for Foreign Affairs, on Sunday resigned from the position following an unsuccessful bid to become the nation's Prime Minister (PM).

(Photo: AFP)

Bishop was eliminated in the first round of voting in a ballot on the leadership of Australia's Liberal Party of Australia despite having served as deputy leader of the party for 11 years.

Scott Morrison defeated Peter Dutton by 45 votes to 40 in the final ballot and was sworn in as Australia's 30th PM, and seventh since 2007, on Friday evening.

Morrison asked Bishop to reprise her ministerial portfolio but on Sunday she announced she would step down.

"Today I advised the Prime Minister that I will be resigning from my Cabinet position as Minister for Foreign Affairs," she said in a statement.

Friday's leadership challenge was engineered by former Home Affairs Minister Peter Dutton and his conservative colleagues who believed the party had become too moderate under Turnbull's leadership.

Then Morrison defeated Dutton 45-40 in the ballot on the leadership of the governing Liberal Party to end the week-long chaos in the parliament.

Josh Frydenberg, who served as Energy and Environment Minister under Turnbull, was elected as Morrison's deputy leader after defeating Health Minister Greg Hunt and Trade Minister Steven Ciobo in the ballot and will succeed Morrison as Treasurer.