Duffy was firm favourite to take over the role from Andrew Motion, who has stepped down after completing a 10-year tenure. The royal post, held by the likes of John Dryden, William Wordsworth and before Motion, Ted Hughes, used to be for life, but Duffy, like Motion, will hold it for 10 years. "I look on it as a recognition of the great women poets we have writing now," Duffy told BBC Radio. "I've decided to accept it for that reason."
She had been in the running for the role in 1999 but lost out to Motion over what media reports said were concerns about how people would react to a lesbian laureate. Duffy is probably best known for her 1999 collection "The World's Wife" in which she tells the stories of the women behind some of the leading men through history.
Other highlights among her collections, many of which have won major awards, are "Standing Female Nude" (1985), "Mean Time" (1993), "Feminine Gospels" (2002) and "Rapture" (2005). Duffy also writes picture books for children and plays. Last year, Britain's biggest exam board, AQA, was accused of censorship after it removed a poem by Duffy containing references to knife crime from the GCSE syllabus. The poem starts: "Today I am going to kill something. Anything./I have had enough of being ignored and today/I am going to play God."
Prime Minister Gordon Brown called her "a truly brilliant modern poet who has stretched our imaginations by putting the whole range of human experiences into lines that capture the emotions perfectly." Judith Palmer, director of the Poetry Society, which marks its centenary this year, also welcomed the appointment.
"It shows how far this country has come that a woman, and a woman like Carol Ann, can hold an appointment such as Poet Laureate," Palmer told Reuters. "That is incredibly heartening for all of us. It focuses attention on the wide range of excellent women poets working in Britain at the moment."
The new appointment is likely to reignite debate among literary circles over whether Britain really needs a Poet Laureate, who is expected to compose poems to mark major state occasions and other national events.
The post is seen as a difficult one. Motion, generally viewed as a successful laureate for actively promoting verse, complained last year of suffering from writer's block. "The pressures and peculiarities of the laureateship, some of which I put myself through, did have a rocky effect on my life," he said in an interview with the Independent newspaper.
"It was a strange mix of making me self-conscious, that so few writers are made to feel because of being so public. There is an isolation in being the Poet Laureate." The holder of the title receives 5,750 pounds a year. Duffy said she would give the fee to the Poetry Society. According to the Society, the laureate's original salary was 200 pounds per year plus a butt of canary wine. John Betjeman had the tradition revived in 1972, and today's laureate continues to receive a barrel of sherry. The first official Poet Laureate is widely recognised to be John Dryden in 1668, although others fulfilled a similar function before him.