He is German Cardinal Joseph Ratzinger, 78, who delivered the homily at John Paul's funeral and has been the Vatican's chief overseer of doctrine since 1981.
He will be known as Pope Benedict XVI, said Cardinal Medina.
Greeting the masses in the square after the announcement, the new Pope raised his hands, clasped them together, and said: "Dear brothers and sisters, after the great Pope John Paul II, the cardinals have elected me, a simple humble worker in the field of the Lord. … Above all, I put myself in the hands of your prayers."
He then led a benediction.
White smoke emerged from the Sistine Chapel chimney and bells rang out shortly after noon ET Tuesday – 6 p.m. in Rome – signifying that the 115 cardinals sequestered inside a high-security Vatican hotel had elected the new Pope.
Ratzinger will be the church's 265th pontiff and called upon to build upon the legacy of the late John Paul II.
Several thousand pilgrims and tourists packed St. Peter's Square awaiting word of the decision, and greeted the signals that one had been reached with cheers.
The decision was reached during the second session of the second day of deliberating. Pope John Paul II died April 2 at age 84.