UPDATED 11.44pm: Tony Abbott has been dumped as Australia's Prime Minister. 

Malcolm Turnbull has won the Liberal leadership challenge with 54 votes.

Tony Abbott received 44 votes.

Julie Bishop defeated Kevin Andrews for the deputy leadership 70-30, after Michael Ronaldson joined the meeting to take the total voter numbers to 100.

Turnbull will become Australia's 29th prime minister once he is sworn in by the governor-general, most likely on Tuesday.

Malcolm Turnbull announced this evening that he would challenge Tony Abbott for the Liberal leadership after the communications minister resigned from cabinet.

Tony Abbott announced he would hold a ballot for the the leadership and deputy leadership, which he expected to win.

"There will be a party room ballot for both the leadership and the deputy leadership positions later this evening. I will be a candidate and I expect to win." 

Turnbull said it was clear the government had not been successful in providing the economic leadership that the nation needed.

He said he made the decision after consulting with party colleagues and many Liberal supporters in every walk of life.

Abbott has served in the role of Prime Minister for a year and 360 days, a shorter time than either Kevin Rudd or Julia Gillard.

Rudd's tenure lasted two years and 286 days over two periods, while Gillard had three years and three days in the top job.

Abbott is the 10th shortest-serving prime minister in Australia's history.

Labor's Frank Forde had the shortest career in the top job, lasting seven days in 1945.