Angela Merkel's long exit from politics begins Friday when her party gathers in Hamburg to decide whether to appoint her chosen successor as its new leader or break with the legacy of her 13 years in charge of Germany.
She beat CDU rival Friedrich Merz narrowly, claiming 517 votes of the 999 cast by party delegates.
The third candidate, Health Minister Jens Spahn, was eliminated in the first round of voting earlier on Friday.
AKK will hold the party leadership, while Merkel will retain the chancellory until the end of her term in 2021.
The choice of Annegret Kramp-Karrenbauer, dubbed mini-Merkel, as her successor makes that a likely scenario.
Ms Merkel plans to serve out her full term as chancellor.
During the leadership campaign, she took more a cautious stance on the future of Europe than Merz, who said Germany should "contribute more" to the European Union because it benefits from a euro that is "too weak for our economy".
But the party delegates - many of them career politicians - preferred Kramp-Karrenbauer, often known by her initials, AKK.
She reminded the CDU of other electoral successes last year, avoiding mention of this year's setbacks in state elections, which were heavy blows for her.
"It has been a great pleasure for me, it has been an honour", Merkel said, as she received a standing ovation lasting almost 10 minutes, and she was herself trying hard to hold back tears.
AKK's message, in contrast to her opponent, was that the party should have the courage to stay its course rather than try harder to appeal to voters who have peeled off to support far-right policies and politics.
"This party is not split - we all have the task of working on the unity of this party", she told a party congress in Hamburg.
Kramp-Karrenbauer is the favorite to run for chancellor in the next election, though that isn't automatic.
After a decade as deputy leader of the powerful Women's CDU she then made the leap up into the party's national committee in 2010.
"I am grateful for the time that is behind me, and I am glad for being able to continue working as chancellor", she said.
She said she meant to stay as chancellor until the next election in 2021.
In recent weeks, the new party leader sought to put a careful distance between herself and Merkel without disavowing her, saying she has had "very lively discussions" with the chancellor on various subjects.
AKK is believed to have Merkel's strong backing but much will depend on how deep and widespread the longing is for a more conservative profile.
The German chancellor, who has been a key crisis manager during both the euro crisis and the migration crisis, is a divisive figure both at home and around Europe, especially with her 2015 decision not to close Germany's borders to asylum seekers, or Germany's perceived reluctance to bail out Greece. "And it let Merkel have her way one more time", said Carsten Nickel, managing director at political consultancy Teneo.
"Since Wolfgang Schaeuble has now opened the floodgates, I can say that I am convinced that Annegret Kramp-Karrenbauer has the best chance to unite the CDU and win elections", Altmaier told regional newspaper Rheinische Post.