ED Miliband praised Labour's "courage to change" as the party voted overwhelmingly to reform rules on party membership, the link with unions and how the leader is elected - changes that are now expected to be adopted by the Scottish Labour Party.
The party's Scottish Executive Committee is due to meet in the next few days, when it will begin the process of considering how the party north of the Border will respond to the changes adopted by the UK party. But the expectation is that it, too, will decide to scrap the old electoral college system and move to voting for a leader using one member, one vote.
No decision or action, however, is expected until the end of the year - ie after the independence referendum.
Miliband had urged the system of one member, one vote for leadership elections and an end to the automatic affiliation of union members. After a three-hour special conference at the vast ExCeL centre in the east end of London where several hundred delegates heard impassioned speeches, mainly in favour of the proposed reforms, the vote showed 86.29% in favour and 13.71% against.
Miliband then took to the stage for a second time to thank his party for agreeing to his proposals, which he first announced last July in the wake of the candidate selection row in Falkirk.
He told the audience of MPs, trades union leaders and other delegates that he had taken a "big risk" when he put forward the reforms but stressed: "I did not believe we could face up to the challenges the country faced if we didn't face up to the challenges faced by our party."
The party leader thanked members, saying: "You should be proud of the Labour Party that has shown the courage to change." He said some people in Britain had felt Labour had lost touch with them, and they had been right, but he insisted: "These changes are designed to ensure that this party never loses touch again."
In his initial address, Miliband insisted he was proud of Labour's link with the trades unions, declaring: "I want the voices of working people to be heard louder in our party than ever before."
The proposals were put forward to delegates following a review by Labour peer Ray Collins, who consulted members widely, including the Scottish Labour Party, on the way forward.
The first key change is switching trades union members' automatic affiliation to one of a voluntary opt-in. Miliband said by being allowed to actively opt in to be a supporter, for a £3 fee, Labour would be transformed into a genuine "mass movement" again - in contrast to the Conservatives.
The second key change is scrapping the electoral college - made up of trades unions, parliamentarians and party members - which elects the leader in favour of one member, one vote. Yet MPs will retain the exclusive right of nominating candidates, who will have to gain a higher level of support, 15%, to be able to stand.
While the new leadership rules will be put in place this year, changes to the party's funding will be phased in over five years.
Significantly, however, aspects that will not be changed include the union block vote at conference and the amount of money the unions can donate to the party.
Miliband and his colleagues accept that the reforms could have significant drawbacks as they will hit the number of union members affiliated to the party as well as funds. Indeed, one delegate said he opposed the reforms because they would "impose a severe financial burden" on the party. Some fear Labour could lose millions of pounds in the run-up to the next General Election.
Next week, the executive of Labour's biggest donor, Unite, which supported the reforms and has handed over £11 million since Miliband became leader, will meet to discuss whether to cut its affiliation with Labour.
The union has one million members affiliated to Labour, worth some £3m a year, but around 400,000 of these do not vote Labour, which the union leadership said means it is "honour-bound" to review its funding.
During the contributions from delegates, the GMB's Paul Kenny insisted union collectivism was "not for sale" while Unison's Dave Prentis called for Labour to focus on getting rid of the Coalition Government with "no more washing out dirty linen in public". Both supported the changes.
After the vote, Margaret Curran, the shadow Scottish Secretary, said: "These reforms offer us an opportunity to rebuild our base in Scotland and reach out to ordinary people with the message that Labour offers real change."
Meantime, Conservative Party chairman Grant Shapps dismissed Labour's reforms as a "white flag" to union bosses, which allowed them to tighten their "stranglehold" on the party.
He said: "It's the same old Labour. Union bosses still pick the leader, buy the policies and rig the selections."