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Robert Jenrick and Kemi Badenoch will battle it out to be the next leader of the Conservative Party after James Cleverly was eliminated from the race.
Tory MPs held a final vote on Wednesday to reduce the field to a final two, who will then go to a ballot of Conservative members.
After picking up 42 votes in the final round of voting, Ms Badenoch re-established herself as the favourite after lagging behind previously.
Robert Jenrick, her close rival on the right, picked up one vote shy of Ms Badenoch, while Mr Cleverly - who was sen as someone who could have united all wings of the party - won the backing of 37 MPs.
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The selection of Ms Badenoch and Mr Jenrick means the Conservative Party is heading towards the right and the immigration will be at the top of the agenda.
Mr Cleverly's elimination from the race came as a surprise after he rallied in the previous round of voting following what was considered to be a strong performance at Conservative Party conference.
Political reporter Alix Culbertson, who was in the room as the result was announced, sais "disbelief resounded around the room" after it was confirmed Mr Cleverly would not be in the final two.
"There was an audible gasp as 1922 Committee chair Bob Blackman announced James Cleverly had not got enough votes to go through to the final two," she said.
"Jenrick supporters are quietly celebrating. MP Ed Argar, who is backing Mr Jenrick, said he predicted yesterday Mr Jenrick was likely to be in the final two.
"He was beaming as he left the committee room after the vote."
Following the result Mr Cleverly posted on X: "I'm grateful for the support I've received on this campaign from colleagues, party members and the public.
"Sadly it wasn't to be. We are all Conservatives, and it's important the Conservative Party unites to take on this catastrophic Labour government."
It came after Tom Tugendhat, the former security minister who was running from the centrist wing of the party, was knocked out of the race after receiving the least votes from MPs on Tuesday.
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The result marks a comeback for Ms Badenoch, who while starting out as the favourite in the early stages of the contest, was later pursued by Mr Jenrick who overtook her in the first, second and third MPs' ballot.
The party membership vote will close at 5pm on Thursday 31 October. The winner, who will become leader of the party and the Opposition to the Labour government, will be announced on Saturday 2 November.
Labour Party chairwoman Ellie Reeves said: "After months of gaffes, wild unfunded policies and infighting, Tory members now have the unenviable task of choosing between two of the architects of Tory failure.
"Both Kemi Badenoch and Robert Jenrick are central figures in 14 years of hapless leadership and decline, and have already proven they've learned nothing from the mistakes that took the Conservative Party to its worst defeat in modern history.
"While the endless bickering continues, Labour is fixing the foundations and sorting out the mess that these two deeply unimpressive figures left behind."
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