Marin, who is currently the Finnish Minister of Transport and Communications, narrowly won over Antti Lindtman, the 37-year-old chairman of the Social Democratic Parliamentary Group, in a vote of 32-29, Xinhua news agency reported.
The vote was carried out at the Social Democratic Party Council on Sunday evening. The results of the vote were announced in a nationally-televised broadcast.
The position of the prime minister became vacant as the cabinet under former Prime Minister Antti Rinne had to resign following the loss of confidence in him of one of the coalition partners, the Centre Party.
The previous coalition composition will continue. The five parties met on Sunday afternoon and pledged adherence to the program of the outgoing cabinet. The coalition comprises the Social Democrats, the Centre, the Greens, the Left Alliance and the Swedish People's Party.
Following her victory, Marin gave a brief statement calling for party unity. Procedural formalities of the government change will continue on Monday. Local media said President Sauli Niinisto is likely to appoint the new government on Tuesday.
Marin has been Finland's Minister of Transport and Communications since June of 2019. She is also SDP deputy chair, who led the party during Rinne's extended sick leave last winter. Marin is also a member of parliament.
She became nationally known first in the municipal political scene in Tampere, the second largest town in Finland. She was the chairperson of the City Council of Tampere from 2013 to 2017.
Marin has a master's degree in Administrative Sciences in Tampere University.
( With inputs from IANS )