New Zealand's main opposition political party has elected a former trade union boss as its leader following a big election defeat two months ago.

Andrew Little was chosen by the liberal Labour Party Tuesday from among four candidates after former leader David Cunliffe stepped down following the September election.

The election saw conservative Prime Minister John Key win a third term in office after his National Party won 47 percent of the vote. The Labour Party won 25 percent of the vote, its worst showing in more than 90 years.

Little didn't announce any major new policies in his acceptance speech, saying instead the party would review its policies.

He just edged Grant Robertson in the contest, who had hoped to become the party's first openly gay leader.