Stubb is pro-European and a strong supporter of Ukraine who has taken a tough stance towards Russia.
He declared himself winner in the run-off vote after securing 51.6 per cent of the votes as 99.7 per cent of ballots had been counted, against Haavisto's 48.4 per cent, justice ministry data showed.
Finland new head of state will be responsible for its security and foreign policy, including the recently approved NATO member's stance towards Russia, with which it shares a long border.
In televised remarks Stubb called his victory "the greatest honour" of his life.
"The feeling is calm, humble but of course at the same time I am extremely happy and grateful that the Finns in such large numbers have voted and that I get to serve as president of the Republic of Finland," he said.
Stubb, a former prime minister, had won the first round on January 28 with 27.2 per cent of the vote ahead of Haavisto on 25.8 per cent.
He has also led Haavisto in opinion surveys, most recently by 6-8 percentage points.
Haavisto congratulated Stubb as "the 13th president of Finland".
"I believe Finland now gets a good president for the republic. Alexander Stubb is an experienced, competent person for the job. No more babble," he said.
The vote marks a new era in Finland, which for decades has elected presidents to foster diplomacy, in particular with neighbouring Russia, and opted not to join military alliances so it could soothe tensions between Moscow and NATO.
But Finns changed their minds after Russia's invasion of Ukraine in 2022, in a rapid U-turn that led to the country joining NATO in April last year.
Now under the Western alliance's security umbrella, Stubb will replace Sauli Niinisto, who is retiring after two six-year terms in which he earned the nickname "the Putin Whisperer" for his previous close ties with the Russian leader.
Stubb will have a central role in defining Finland's NATO policies, while taking the lead on overall foreign and security policy in close cooperation with the government and acting as commander-in-chief of the armed forces.
"Warm congratulations to Alexander Stubb. Finland is our close friend and partner," Swedish Prime Minister Ulf Kristersson said in a post on X.
