Federal agriculture minister Pawar defeated Dalmiya's incumbent nominee, Ranbir Singh Mahendra, 20-11 in the election for the president of the faction-ridden Board of Control for Cricket in India (BCCI) in Kolkata on Tuesday.
The election was conducted by India's former chief election commissioner, T.S. Krishnamurthy, on the orders of the Supreme Court after voting was put off in September due to legal wrangles.
Pawar, 64, won the election on his second attempt after losing out to Mahendra last year. At that time, it was Dalmiya's casting vote that decided the secret ballot which was tied 15-15 with one vote disqualified.
Pawar, a former chief minister of the western state of Maharashtra, currently heads the Mumbai Cricket Association.
Politicians have ruled the cash-rich BCCI in the past, but this was the first instance since Dalmiya's induction to the board in 1979 that he or his nominee had lost an election.
The 65-year-old Dalmiya, a former president of the International Cricket Council, is a known master of realpolitik whose financial wizardy is largely credited with turning the gentlemen's game into a lucrative global sport.
The BCCI has assets worth around 250 million dollars and the latest annual report gave its gross earnings for the year 2004-05 as 46 million dollars.
Dalmiya was credited with bringing the World Cup to the Indian sub-continent, which has held the event twice in 1987 and 1996.
Two former BCCI chiefs, Inderjit Bindra and Raj Singh Dungapur, broke away from the Dalmiya faction a few years ago and threw their weight behind Pawar.
"I'm grateful to all those who supported me and my entire team," Pawar told reporters outside the conference hall of a five-star hotel where the election was held.
"We will concentrate on building basic infrastructure for cricket throughout India. I'm sure our collective efforts will be able to give justice to young, budding players and the cricket loving people of the country."
There was no immediate comment from Dalmiya as the BCCI members gathered again to conduct the rest of the business at the annual general body meeting.
The Pawar faction also swept elections for the other office-bearers with Niranjan Shah taking over as secretary from Karunakaran Nair.
Mohinder Pandove beat former Test cricketer Brijesh Patel for the post of joint-secretary while Tamil Nadu businessman N. Srinivasan was made the treasurer in place of Jyoti Bajpai.
Krishnamurthy had told reporters on Monday that he was surprised at the factionalism within the BCCI.
"Many of the affiliated units in the BCCI have multiple factions," he said.
"I thought this was a small election as compared to India's parliamentary polls but there was a lot of work before the votes were counted."