Ms Lagarde fought off Mexico's Agustin Carstens for the job, although an IMF statement said that both candidates "were well qualified".

She received backing from America and Europe and key emerging market nations, including China, India and Brazil.

The post became vacant following the resignation of Dominique Strauss-Kahn.In a statement, the IMF said that its 24-member board regarded both candidates as highly suitable for the job, but had decided on Ms Lagarde "by consensus".

Although Ms Lagarde is the first woman to become managing director since the IMF was created in 1944, she maintains the tradition that the post is held by a European.

It has been convention that Europe gets the IMF, while an American gets the top job at the World Bank.

However, when Ms Lagarde begins her five-year term on July 5, her immediate task will be to deal with the efforts of the IMF and European Union to resolve the Greek debt crisis and prevent contagion to other eurozone economies.

In a television interview minutes after her appointment, Ms Lagarde pressed Greece to move quickly to push through unpopular austerity measures that the IMF and EU have said are a prerequisite for further aid.

Before becoming France's finance minister in June 2007, she was minister for foreign trade for two years.

Prior to moving into politics, Ms Lagarde, a former champion swimmer, was an anti-trust and employment lawyer in the US.