The promotion came despite strong opposition from a club of BJP heavyweights led by veteran leader LK Advani.
This is Mr Modi's second big promotion in as many months and his ardent admirers, a growing tribe in the BJP, say it virtually makes him the face of the party for the 2014 general elections.
The applause when the announcement made today reportedly lasted for about 10 minutes.
In March, Mr Modi was inducted into the party's highest decision-making body, the parliamentary board and the central election committee that he will now head. The parliamentary board is an exclusive club of 12 top leaders of the BJP and Mr Modi is the only Chief Minster in it as a special concession.
It became clear in December 2012 that Narendra Modi's aspiration to step out of Gujarat could not be ignored. He registered a third successive and very convincing win in the Assembly elections and a growing band of ardent fans in his party insists he was the only serious contender to the post of Prime Minister were the BJP to come to power next year.
In the days since, he has lunched with ambassadors of the European Union, which ended its decade-long boycott of the Gujarat Chief Minster saying, "we are now in a new phase." They had boycotted all diplomatic engagement with him after the 2002 communal riots in Gujarat. And though the US continues to deny him a visa, some lawmakers in that country have suggested that the policy be reviewed.
Critics accuse Mr Modi of not doing enough to stem communal violence in 2002; some have even alleged that he quietly encouraged it - allegations that he has strenuously denied and that have never been proved in inquiries.
But the riots have proved a difficult taint to remove, though not for want of effort on Mr Modi's part. In the last few years the Gujarat CM has made concerted efforts to project himself as a moderate, trying to promote religious harmony; his political speeches stopped focusing on Hindu supremacy and started trumpeting investment as he sought to build an appeal based entirely on good governance and development.
His detractors allege that marketing savvy and not a change of heart has shaped the new Modi.
Officials in Mr Modi's government and local business leaders paint the picture of a man with a phenomenal memory, great attention to detail, unflagging energy and a flair for publicity. People who have met him say nothing escapes him. But they also describe him as a man with a vindictive streak, capable of holding grudges for years and intolerant of dissent.
Narendra Modi was born to lower middle-class parents in northern Gujarat on September 17, 1950. He holds a Master's degree in political science.
Mr Modi joined and rose through the ranks of the Rashtriya Swayamsevak Sangh, the ideological parent of the BJP, early in life.
A stocky, bespectacled man with a trimmed white beard, the Gujarat CM is known for his ascetic lifestyle and enthusiasm for yoga. He rises early and has for years read news on the Internet. He uses social media very effectively, tweeting extensively and has more than 1,405,500 followers on Twitter.
Local media say he married at a young age, but he has never publicly acknowledged this. He has no children. Mr Modi first became Chief Minister in October, 2001, just months before the communal riots.
Get Breaking news, live coverage, and Latest News from India and around the world on NDTV.com. Catch all the Live TV action on NDTV 24x7 and NDTV India. Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.