Barely 12 hours after nominating for the top job, Ms Fentiman on Tuesday announced she would instead throw her support behind Mr Miles, who is deputy premier.
The 46-year-old emerged triumphant after a reported backroom deal between unions sealed the fate of Ms Fentiman, who is health minister.
Treasurer Cameron Dick is set to become the new deputy premier.
Shannon Fentiman bowed out of the race to replace Annastacia Palaszaczuk as Queensland premier. (Jono Searle/AAP PHOTOS)
Mr Miles will replace Annastacia Palaszczuk, who announced on Sunday she would be stepping down after almost nine years in the top job.
He will address media on Tuesday but briefly spoke to reporters ahead of a Tropical Cyclone Jasper update.
"I love this state and I have been committed to serving this state for a long time," he said, when asked about becoming premier.
"This has always been about Queenslanders and this morning the focus is on keeping Queenslanders safe (with a cyclone approaching)."
At first, a messy leadership battle looked set to decide who would replace outgoing Ms Palaszczuk.
Mr Miles was quick to declare his nomination after Ms Palaszczuk personally endorsed him.
Ms Fentiman then put herself in the running on Monday afternoon, saying she would not be contesting for the leadership if she didn't have "significant support".
They appeared to be on a collision course ahead of a caucus meeting on Friday to endorse the new parliamentary leader ahead of the October 2024 state election.
However, Ms Fentiman on Tuesday morning withdrew her bid, saying it was clear Mr Miles had the numbers to become the next premier.
"It is clear that a majority of Labor members of parliament will support Steven Miles to be the next leader of the Labor Party, and therefore the next premier of Queensland," Ms Fentiman posted on Facebook.
"As a result I will not be standing as a candidate for the Labor leadership when caucus meets on Friday.
"I want to congratulate Steven and offer my support in the work ahead."
A contested leadership ballot could have dragged on for weeks if a lone candidate had not emerged before the Friday caucus.
Under party rules, the vote would have been split between elected MPs, rank-and-file members and affiliated unions.
Mr Miles was considered the frontrunner with the support of the biggest group in Labor's dominant left faction, the United Workers Union (UWU).
Treasurer Cameron Dick is tipped to become deputy premier of Queensland in a cabinet reshuffle. (Darren England/AAP PHOTOS)
Mr Dick, from Labor's right faction that is aligned to the Australian Workers Union, had been linked to a leadership tilt but never officially nominated himself.
"I am just talking to my colleagues at the moment," he told media on Monday.
It is believed Mr Dick's AWU faction agreed to get behind Mr Miles after brokering a deal with the deputy premier's UWU contingent during late night talks.
That effectively sunk Ms Fentiman's bid.
"Steven is a longstanding friend and he will have my full support as premier of Queensland," Ms Fentiman said.
"Now is the time for unity and Labor's focus must turn to delivering for Queenslanders and retaining government at next year's election.
"I will continue working tirelessly to ensure the return of a Labor government for Queensland."
Mr Miles now looks set to be sworn in as Queensland's 40th premier after Ms Palaszczuk officially tenders her resignation to Governor Jeannette Young on Friday.
His ascension is set to spark a cabinet reshuffle.
Mr Miles has been deputy premier since 2020 during eight years as a Labor MP.
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