Farage – who has a fair claim to have influenced the course of British politics more than any other non-MP following his campaign’s victory in the June Brexit referendum – is now thought likely to look for a media career, although he remains an MEP until Britain leaves the EU.
The future of the party itself, having achieved its raison-d’etre despite only having one MP out of 650 at Westminster, is less certain.
The leadership result came as the other 27 members of the EU met for the first time without the UK, at a summit in Bratislava.
Diane James, an MEP, was announced as his replacement at the party’s annual conference in the seaside resort of Bournemouth where Farage used his farewell speech to hail the “fairytale” Brexit result.
“Without us, there would have been no referendum, without you and the people’s army there would have been no ground campaign,” said Farage, who has campaigned for a British exit from the EU since the early 1990s.
“Together we have changed the course of British history,” he told a crowd of mostly elderly supporters waving Union Jack flags.
James, the party’s home affairs spokeswoman, said UKIP was a “winning machine” but warned the party had only won a “heat” in the race to leave the EU and the exit document was not yet signed.
“Until we get a signature, we’re still in, they still tell us what to do,” she told party members.
Farage co-founded UKIP in 1993, growing it into Britain’s third party by the number of votes cast.
“I guess in a sense it’s been my life’s work to get the party to this point,” he said.
He said the party would continue pressuring Prime Minister Theresa May to go ahead with Brexit, warning UKIP would sweep up discontented voters from both right and left if the government failed to push ahead with the departure.
He said he would remain active in political life, with plans to travel across Europe to meet similar political movements, but would not seek to influence the new UKIP leader.
Five candidates ran for the party leadership, with James the bookmakers’ overwhelming favourite.
She came well ahead of fellow European Parliament members Jonathan Arnott and Bill Etheridge, local authority councillor Lisa Duffy and party executives Elizabeth Jones and Phillip Broughton.
James will take over a party torn by infighting over the party’s future direction in the wake of the Brexit vote.
“UKIP’s future is unclear,” said Matthew Goodwin, an expert on the party at the University of Nottingham.
“In the aftermath of the vote for Brexit, the party has become seriously divided between separate factions and might also struggle to sustain public support from social conservatives in the new political landscape,” he told AFP.
The anti-immigration party won 12.6% of the vote in the 2015 general election, though it only has one MP to show for it under Britain’s first-past-the-post system.
The governing centre-right Conservative Party, under its new leader May, “now appears committed to delivering Brexit while also offering policies that have long been advocated by UKIP”, such as introducing more selective schools, said Goodwin.
The government’s new slant under May has “restricted political space for the populist right”, he added.
Nonetheless, UKIP is hoping to consolidate its popularity on the back of Brexit, boost its tally of MPs in the next general election slated for 2020, and replace a wobbling Labour Party as the official opposition.
The leadership campaign was thrown into turmoil as soon as it began, with the previous favourite candidate, Steven Woolfe, disqualified for submitting his candidacy 17 minutes after the deadline, citing computer problems.
Millionaire businessman Arron Banks, UKIP’s main financial backer, who like Farage had backed Woolfe, has reportedly said he wants to create a new right-wing movement or party appealing to Brexit voters.
Banks could deal UKIP a potentially fatal blow if he decides to withdraw his funding — another headache for new leader James.