The Financial Times has appointed its first female editor, announcing that Roula Khalaf will replace Lionel Barber at the top of the business newspaper.

Khalaf has served as deputy editor since 2016, with the newspaper emphasising her role in leading its foreign reporting and her work on increasing newsroom diversity and attracting more female readers.

Her elevation to the top job comes after a recruitment process that lasted most of the year and involved the FT’s Japanese owners, Nikkei, in assessing the many leading internal candidates. Khalaf ultimately edged out rival candidates including John Thornhill, Alec Russell and Robert Shrimsley.

Khalaf said on Tuesday it was a “great honour”. She added: “I look forward to building on Lionel Barber’s extraordinary achievements and am grateful for his mentorship through the years.”

Speculation over Barber’s future reached a new high last week, when he flew to Japan to meet executives at Nikkei, although other staff pointed out that he had timed the visit to coincide with England’s appearances in the Rugby World Cup. He announced on Twitter on Tuesday morning that he would step down in the new year.

Lionel Barber announced that he would step down in the new year. Photograph: Linda Nylind/The Guardian

Under Barber’s leadership, the FT has moved from being a print-focused news provider to include a digital business with more than a million paying subscribers, and expanded its remit; recent investigations into the President’s Club, the advertising executive Martin Sorrell, and allegations against the UKFast boss, Lawrence Jones, have shown a willingness to move away from its traditional focus on business news.

The Nikkei chairman, Tsuneo Kita, said: “I have full confidence that [Khalaf] will continue the FT’s mission to deliver quality journalism without fear and without favour, inspire and lead a team of the most talented journalists and pursue the FT’s new agenda covering business, finance, economics and world affairs.”

Before joining the FT in 1995, Khalaf, who was born in Lebanon, worked at Forbes, where she wrote an early critical profile of the trader Jordan Belfort – later earning her character a brief appearance in the film The Wolf of Wall Street.