The Buckingham MP led the voting throughout, and beat off the challenge of rival Sir George Young in a dramatic head-to-head. He received 322 votes in the third round to Sir George's 271, all the other eight candidates having been eliminated, or dropped out, after the second ballot.
Taking the Chair, Mr Bercow said: "We need to reform" but added that the "vast majority of Members of this House are upright, decent, honourable people."
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Prime Minister Gordon Brown said the election of a new Speaker was an "important step" in the "process of change".
Mr Brown added: "Undoubtedly the road ahead will not be easy" but under Mr Bercow the Commons was on the "path to renewal".
Mr Bercow topped the second ballot, boosting his support from 179 to 221. But there were signs that momentum was shifting in favour of North West Hampshire MP Sir George, after he racked up 62 extra backers to reach 174.
Deputy speaker Sir Michael Lord was eliminated after coming last among the 10 candidates, while Labour backbencher Parmjit Dhanda and Tory veterans Richard Shepherd and Sir Patrick Cormack also fell at the first hurdle after securing less than 5 per cent of the 594 MPs' votes cast.
Miss Widdecombe, who hoped to do the job until her retirement at the next election, was eliminated with just 30 votes.
The contest to replace Michael Martin as Speaker is being held for the first time under a secret ballot system which could delay a final result until late this evening.
In the first ballot, held after each candidate made their pitch in a short speech to the Commons, Mr Bercow secured a comfortable lead ahead of fellow Tory Sir George Young with 112 MPs' votes.
They were followed by Labour former Foreign Secretary Margaret Beckett on 74 votes, deputy speaker Sir Alan Haselhurst on 66, Liberal Democrat Sir Alan Beith on 55, Tory former Home Office minister Ann Widdecombe on 44, Mr Dhanda on 26, Mr Shepherd with 15, Sir Patrick on 13 and Sir Michael on nine.
The surviving six contenders now go into a second round, which could be followed by further ballots until one candidate secures the support of more than 50% of those voting.
Mr Martin, who was forced out by discontent over his handling of the parliamentary expenses scandal, today formally quit the Commons by "taking the Manor of Northstead" - a procedural device used to enable MPs to resign between elections.
Buckingham MP Mr Bercow drew laughter from a packed House of Commons as he joked about his bid to become Speaker at the relatively young age of 46.
He pledged to stay in place for a maximum of nine years if elected and described himself as the "clean-break" candidate, who was ready and willing to bring about change.
Speaking without notes, Mr Bercow said: "I want to implement an agenda for reform, for renewal, for revitalisation and for the re-assertion of the core values of this great institution in the context of the 21st century."
Even after his comfortable lead in the first round of voting, the complex system of "exhaustive secret ballot" being used in the election means he is far from assured of final victory.
MPs will take part in a series of votes over the course of this evening, with the candidate finishing last being eliminated in each round, along with any securing less than 5% of votes.
Mr Bercow is understood to have won most of his support from Labour MPs, who see him as the candidate most likely to be an irritation to Conservative leader David Cameron.
But he may struggle to pick up votes among supporters of the Tory candidates eliminated so far, as many on the Conservative benches regard him as a turncoat after he accepted a job from Gordon Brown last year.
He is facing a strong challenge from North West Hampshire MP Sir George Young, who used his speech to announce a series of ideas for reform which he believed would "reconnect" the Commons with the public.
"I want to see a House of Commons that regains its self-confidence, I want a more independent House of Commons, a more effective House of Commons, a more relevant House of Commons and a more accessible House of Commons," he said.
"I want to see the terms of trade tilted away from the executive, back to Parliament."
Meanwhile, Mrs Beckett said that the Speaker should not attempt to "drive the House" but nor should he or she be an "obstacle".
The Commons faced "unprecedented and uniquely difficult circumstances" in the wake of the expenses crisis, she said.
"No one person can resolve these problems. The challenge is one the House as a whole must address."
One backbench Labour MP spoiled his ballot paper in the first round of voting rather than vote for any of the candidates on offer.
Bassetlaw MP John Mann said: "It was the gentlemen's club at its worst. None of them have got a strong reforming agenda. Some of the speeches were shocking, after what we have been through recently."
Mr Mann said he would probably use his vote in later rounds of voting in the hope of blocking his least-favoured contenders - including Sir George, Mrs Beckett and Miss Widdecombe - from reaching the Speaker's chair.
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