The 39-year-old Christian Democrat, known as “Mac” in the populous state, takes the helm of the northern German state after outgoing premier Christian Wulff was voted German president on Wednesday evening in Berlin.
McAllister, the son of a Scottish serviceman and a German music teacher, received 80 of the 148 votes at the secret ballot during a special session in Hannover, broadcaster NDR reported.
He is widely expected to maintain Wulff's state cabinet, which was only revamped in mid-April.
“I accept the vote, am thankful for your trust and offer all representatives in the state parliament my cooperation,” McAllister said directly after the results were announced.
“There are many political friends and companions there, my family is there, my school friends – it is just a good day,” he said.
McAllister also acknowledged he faced big challenges in the state.
"The budgetary situation is difficult, one can't implement what one would like by a long shot because the financial means simply aren't there," he said.
But the new premier was optimistic his centre-right government of Christian Democrats and pro-business Free Democrats (FDP) stood behind him.
“The convincing voting results are the guarantee for successful CDU and FDP coalition work in Lower Saxony,” he said.
McAllister also pledged his support of Chancellor Angela Merkel, who suffered a major blow on Wednesday with Wulff's humiliating presidential election.
“I have a great deal of respect for the chancellor,” he said. “The federal government and this state government have a shared goal.”
He also condemned the public criticism of Merkel from within her coalition.
“I find that there are some in Berlin who are going about celebrating the public conflict,” he said. “That's not respectable.”
Born in West Berlin in 1971, the politician has called himself a “passionate campaigner” devoted to his adopted state. He studied law in Hannover after serving in the German military for two years. He has been in the Lower Saxony parliament since 1998, and quickly rose through the ranks, becoming the general secretary of the CDU there in 2002, and taking on the party's leadership in the state in 2003.
He is married to his wife Dunja and they have two daughters, Mia and Jamie.