The 71-year-old lawmaker, a moderate who has vowed to pursue economic stability and closer ties with Asian neighbors, won a clear victory over former foreign minister Taro Aso, 66, with 330 votes from Liberal Democratic Party (LDP) members, compared to Aso's 197.
The defeated Aso was seen as a key ally of ex-premier Shinzo Abe, sharing his patriotic values and hawkish stance on security issues.
Abe unexpectedly announced his resignation as prime minister on September 12 following a difficult year-long premiership, weakened by an upper-house election defeat and a major pensions scandal. He was later hospitalized, suffering stress and exhaustion.
Fakuda is guaranteed election as prime minister when the legislature gathers for a vote on Tuesday, by virtue of the LDP's large majority in the lower house.
The veteran lawmaker served as chief Cabinet secretary from 2000 to 2004.