In key mid-term polls in which President Barack Obama's Democrats were routed, Haley, 38, born of Sikh parents who migrated from Punjab, became only the second Indian-American to be a Governor of a US State after Bobby Jindal of Louisiana; and also the first Indian-origin woman governor.
"You know, tomorrow morning there's going to be a lot of news and a lot of observers that say we made history and in some ways, you can look at me and say we did," Haley said in her victory speech.
"But what I want this to be is that we're turning a page. We're turning a page on where we've been but the history's going to be on where we go," she said.
The news was welcomed by Indian Americans. "Three years ago, I stood in Louisiana celebrating Bobby Jindal's election as Governor. It was an amazing experience tonight to be in my hometown of Columbia with my wife Vatsala and parents and witness Nikki Haley achieve a similar accomplishment just three years later," said Dino Taperra, Indian American Republican Council chairman.
Six other Indian-origin candidates failed to enter the House of Representatives.
Haley received 52 per cent of votes as against her Democratic rival Vincent Sheehan who polled 46 per cent.
The much expected victory did not come before giving some anxious moment to Haley and her campaign. For some portion of the counting of votes, Haley was trailing behind, and then was running neck-to-neck with Sheehan before she took a handsome lead.
Sheehan gave Haley stiffer competition than was expected. She will succeed Republican Governor Mark Sanford.
However, none of the other major Indian-American candidates running for the US House of Representatives, won. A record number of six Indian-Americans were in the fray.
Five of them were Democrats Manan Trivedi from Pennsylvania, Ami Bera from California, Raj Goyle from Kansas, Ravi Sangisetty from Louisiana and Surya Yalamanchili from Ohio. Ashvin Lad from Illinois is the only Republican Indian American in fray.
Haley has served three-terms in the South Carolina House of Representatives where she represented Lexington County and was also the first Indian-American to hold office in that state.
Haley's campaign was rocked by a scandal earlier this year when political lobbyist, Larry Marchant, claimed that he had one-night stand with her at a conference in Salt LakeCity in 2008.
The mother of two, whose husband is a US Army reserves officer, was also hit by another allegation that she had a "physical" relationship with commentator Will Folks in 2007.
Haley rejected the latest allegations as "a false and outrageous desperate attack from a losing candidate's paid campaign consultant in the final week of the race."
Despite these controversies, Haley had the backing of political Republican heavy weights like Sarah Palin and Mitt Romney.
"A strong pro family, pro life, pro Second Amendment, pro development, conservative reformer. Your next governor Nikki Haley," Palin said in her endorsement, earlier this year.
In June, Haley also had to deal with racist comments from Republican state Sen. Jake Knotts who called her a "raghead" on an internet political show called Pub Politics.
The term is a slur typically used against Arabs or other ethnic groups who wear turbans or headdresses "We already got one raghead in the White House," he said.
"We don't need another in the Governor's Mansion."
Slate later apologised insisting that his comments were made in jest.
"Since my intended humorous context was lost in translation, I apologise. I still believe Haley is pretending to be someone she is not, much as Obama did, but I apologise to both for an unintended slur," he said, at the time.
So far only two Indian-Americans have made it to the House of Representatives - Dalip Singh Saund and Bobby Piyush Jindal. In Pennsylvania, Trivedi, an Iraq war veteran, who ahead of the initial counting of votes lost to Republican Jim Gerlach. While Trivedi had received 99,517 votes, Gerlach had received 131,715 of the total votes polled.
In Kansas, Indian-American Raj Goyle, lost the election to his Republican rival Mike Pompe. In the 4th House District of Kansas, Pompe had received 58 per cent of the total votes polled, while Goyle had got just 37 per cent.
In Louisiana's Third Congressional District Ravi Sangisetty lost to Republican rivals Jeffy Landry.
Sangisetty, a lawyer by profession, and who Sangisetty, pitched himself as a "pro-life, pro-gun conservative Democrat" received just 36 per cent of the total votes counted. Landry had received 64 percent of the total votes. Same was the case in Ohio with Surya Yalamanchill, a former Apprentice Contestant, lost to Republican Jean Schmidt by more than 50,000.
In California, Bera was trailing behind with more than half of the votes counted. Bera had received 43.3 percent of the total votes counted, while his Republican rival Dan Lungren had 49.3 per cent, after 63 per cent of the votes were counted.
Another Indian American, Kamala Harris, was trailing behind her Republican rival for California Attorney General, with nearly one-third of the votes counted. Harris was endorsed by the US President, Barack Obama. The President had attended her fund raiser when he went to California last month on his election campaign.