Ethiopia’s ruling party chose a new prime minister, selecting a young politician from one of the country’s most marginalized ethnic groups in a bid for national reconciliation, in the world’s fastest-growing economy that has been threatened by domestic unrest.

After weeks of negotiations, the Ethiopian People’s Revolutionary Democratic Front—the power behind the country’s one-party authoritarian rule—late Tuesday picked Abiy Ahmed, a 42-year-old engineer to lead the party and the country.

Mr. Ahmed is relatively untested, having served just one year as a minister of Science and Technology under the outgoing prime minister. But he has represented in regional parliament the Oromos, an ethnic group that is Ethiopia’s largest, but most marginalized.

His selection ends a process that unnerved Ethiopia’s neighbors and investors, coming nearly two months after the resignation of Prime Minister Hailemariam Desalegn. Mr. Desalegn’s departure presented the world’s fastest-growing economy with its first-ever leadership change that wasn’t precipitated by conflict or the demise of a leader.

Soon after Mr. Desalegn’s resignation, the EPRDF imposed a draconian state of emergency in an effort to stifle dissent as it decided on its own, and the country’s, future. Government security forces cracked down on freedoms of movement and free speech, and arrested opposition figures.