Her appointment brings to an end 22 years of resistance to the promotion of female priests.
Lane said "A remarkable day for me and a historic day for the church. Excited and a little daunted to be entrusted with such a ministry. Conscious of those recognised and unrecognised who have prayed and worked and suffered for this moment".
The general synod of the Church voted to back plans for female bishops in July and formally adopted legislation on November 17.
The appointment will end centuries of male leadership of the Church and comes 20 years after women became priests.
The nomination of Libby as the new Bishop of Stockport was approved by the Queen and announced on Wednesday.
Prime Minister David Cameron tweeted "Congratulations to Revd Libby Lane on becoming the first woman bishop in the Church. An historic appointment and important day for equality".
Downing Street announced that the new Bishop of Stockport - and the first woman bishop in the Church of England will be the Revd Libby Lane, currently Vicar of St Peter's, Hale and St Elizabeths.
As Bishop of Stockport she will serve as a suffragan (assistant) bishop in the Diocese of Chester. She will be consecrated as the 8th Bishop of Stockport at a ceremony at York Minster on January 26, 2015.
Libby Lane was ordained as a priest in 1994 and has served a number of parish and chaplaincy roles in the North of England.
She is one of eight clergy women from the Church of England elected as participant observers in the House of Bishops.
After school in Manchester and University at Oxford, Lane trained for ministry at Cranmer Hall in Durham. She was ordained a deacon in 1993 and a priest in 1994, serving her curacy in Blackburn, Lancashire.
Her husband, George, is also a priest; they were one of the first married couples in the Church of England to be ordained together.
Lane added "I am grateful for, though somewhat daunted by, the confidence placed in me by the Diocese of Chester. On this historic day as the Church of England announces the first woman nominated to be Bishop, I am very conscious of all those who have gone before me, women and men, who for decades have looked forward to this moment".
Archbishop of York Dr John Sentamu said "Libby brings a wealth of experience in parish ministry, in hospital and chaplaincy, in vocations work and the nurture of ordinands".
Archbishop of Canterbury Justin Welby said "I am absolutely delighted that Libby has been appointed to succeed Bishop Robert Atwell as Bishop of Stockport. Her Christ-centred life, calmness and clear determination to serve the church and the community make her a wonderful choice. She will be bishop in a diocese that has been outstanding in its development of people".
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