Isobel Redmond says she is 'satisfied' she has the confidence of the party to lead the Liberals to the 2014 election.
"I am delighted to be re-elected as the leader," she told a press conference.
"Can I also thank the people of this state, for the support they've shown, particularly over the past week."
Ms Redmond earlier survived a leadership challenge by Martin Hamilton-Smith, 13 votes to 12.
When asked whether retaining the leadership by just one vote demonstrated party confidence in her ability, she replied "a win's a win."
"A vote of one is still a win ... Tony Abbott became leader of the Liberals on one vote.
"Today marks a line in the sand for the Liberal party ... we need to get rid of a very bad government in this state and we intend to move forward from here," she said.
Ms Redmond said she was looking forward to working with her newly elected deputy, Steven Marshall, who ousted Mitch Williams.
"We've never had any qualms or any quarrels between us and I look forward to working with him," said Ms Redmond.
"I am more than satisfied the party will lock in behind the new leadership team"
Does a one-vote win show the party's faith in Ms Redmond?
Mr Hamilton-Smith congratulated Ms Redmond on retaining the leadership.
"I think we all need to move on now," he said when he emerged from the party room after the ballot.
"I will honour the decision, I will respect the decision of my colleagues ... the decision has been made and I look forward to the election."
Mr Hamilton-Smith, Member for Waite, also vowed to step aside from Cabinet.
Ms Redmond replaced Mr Hamilton-Smith as leader in 2009.
Member for MacKillop Mitch Williams has lost the deputy leader position to his challenger, Member for Norwood Steven Marshall.
"That's going to be one awkward Christmas party," tweeted Ms Leila.