SYDNEY (AFP) - Mr Kevin Rudd was sworn in as Australia's new Prime Minister on Thursday almost three years to the day since he was ruthlessly ousted from the top job by Ms Julia Gillard, as Labor fights for electoral survival.

The 55-year-old sealed his dramatic return after a leadership ballot on Wednesday, in which Ms Gillard, the country's first female premier, was deposed in a party-room vote and announced her retirement from politics.

Mr Rudd's promotion marks a stunning turnaround for the former leader who will now lead Labor to elections scheduled for Sept 14, which polls predict Mr Tony Abbott's conservative opposition will win by a landslide.

Six key ministers resigned in the aftermath of Ms Gillard's dumping, including her most loyal supporter, Treasurer and deputy leader Wayne Swan.

On Thursday, Ms Gillard's Transport Minister Anthony Albanese was sworn in as Mr Rudd's deputy by Governor General Quentin Bryce while former Immigration Minister Chris Bowen was appointed treasurer.

Labor's popularity has tanked under Ms Gillard but Mr Rudd, who ended a decade of conservative rule with a landslide 2007 election win, remains popular with voters and his elevation is expected to give the party a significant boost.