Deputy President Cyril Ramaphosa has been elected president of the ANC in a narrow victory at the party's 54th national conference in Johannesburg.
Ramaphosa, 65, will be the ANC's candidate for president in the 2019 elections.
Though either presidential candidate could still prevail, Ramaphosa had the edge after the nominations were announced, with the backing of 1,469 ANC branches, compared to Dlamini-Zuma's 1,094.More news: Amtrak train on new route hurtles onto highway, kills 3
The party's treasurer-general Zweli Mkhize and Naledi Pandor declined to stand for the position of deputy president, leaving it a shoot-out between Mpumalanga's ANC chairperson David Mabuza and NEC member Lindiwe Sisulu.
Media reports earlier said the announcement had been delayed after Ms Dlamini-Zuma's camp had demanded a recount. Thousands of raucous Ramaphosa supporters sang and chanted in the conference hall as backers of the defeated candidate sat silent and stony-faced. His reign has been hit with allegations of scandal and corruption which has seen the party of Nelson Mandela's liberation movement plummet in popularity among South Africans.
"It stretches credibility to imagine that Ramaphosa could win the ANC leadership without striking deals with key power brokers who seek to maintain a patronage-based political system". The Saturday night endorsement of Ramaphosa by Baleka Mbete, the party's outgoing national chairwoman and a Zuma ally, also fueled speculation that the race may be swinging in the deputy president's favor.
He has pledged to introduce a minimum wage for workers and will consider privatising some of South Africa's state-owned conglomerates. "The struggle to hold the ANC together would dominate Ramaphosa's tenure as leader and influence all his most important policy decisions".