The Conservative candidate edged home ahead of Labour's Sion Simon in a tight contest that was decided on second preference votes, after the two leading candidates were split by just one per cent.
Former John Lewis boss Mr Street, aged 53, eventually won by 3,766 votes, in an election saw a better than expected turnout of 26.68 per cent.
It capped a disastrous day for Labour, which saw the party decimated in the local council elections.
Triumphant Mr Street proclaimed his victory as the 'rebirth of the new urban Conservative agenda'.
Watch the Express & Star's Facebook Live interview with Andy Street here:
He marked his victory with a message to voters via Twitter
Thank you all so much. I won't let you down. pic.twitter.com/VlPrwsVP4c— Andy Street (@andy4wm) May 5, 2017
In his victory speech Mr Street, who started work with John Lewis on the shop floor in 1985, told cheering supporters: “Naturally I am humbled by the trust of my fellow citizens.
“Back in September I talked about what I wanted to achieve in the campaign.
“I said I wanted it to reach every single community across the West Midlands.
He said he would settle for the small margin of victory 'given the traditional voting patterns across the West Midlands' and added: "We have won by reaching all communities and putting forward a very moderate, tolerant and inclusive plan."
“I said I wanted to present practical solutions to difficult issues and that is exactly what we have done.
Mr Street added: “I want to be a mayor who works for everyone across the West Midlands and binds all of our leaders together, and that’s because ultimately that’s what this job is all about about building a team to champion the West Midlands, building an alliance with central government, with local people, that will put the West Midlands back in its rightful place as the leading region of the UK.”
Ballots were counted at seven sites across the region with the final announcement made at Birmingham's Barclaycard Arena late this afternoon.
Watch E&S Political Editor Peter Madeley assess the result:
There were loud cheers from supporters and cries of "Andy! Andy! Andy!"as the final result was declared yesterday afternoon following a day of high drama.
A visibly disappointed Mr Simon, meanwhile, said Labour needed to learn a lesson on a national level for the defeat.
He conceded that voters had 'lost faith' in the party and added: "There is a portion of traditional Labour voters in the West Midlands who are not confident in our core Labour values."
Lib Dem Beverley Nielsen came third on 30,378 votes, UKIP's Pete Durnell was fourth with 29,051, while Green Party candidate James Burn received 24,260 votes and the Communist Party's Graham Stevenson got 5,696.
Ms Nielsen said she was pleased with her performance. "My vote share (six per cent) was just a little bit lower that I would have liked but coming third is creditable in what is not a Lib Dem heartland.
"It shows there are people out there who are prepared to back the Lib Dem party and are concerned about the hard Brexit."
Mr Burn said: "We are a small, up and coming party in this region, and I think this result shows we have grown a bit and are heading in the right direction.
"I'm pretty pleased overall."
Mr Durnell said he had hoped for a larger share of the vote. "I'm disappointed, but this election has been a two-horse race and the other parties have all been squeezed."
In the first round of voting Andy Street polled 216,280 votes to Sion Simon's 210,259.
As neither of them won more than 50 per cent of the vote, Mr Street took a lead of 6,021 into the second round run-off. He finished on 238,628 votes to 234,862
Sandwell posted the lowest turnout of the Black Country areas, with 23.27 per cent. The others were: Dudley (25.24 per cent), Walsall (24.6 per cent) and Wolverhampton (25.21 per cent).
In total 523,201 people voted in the election.
Mr Street, who quit his £1 million a year job at John Lewis to run for Mayor will oversee the West Midlands Combined Authority, which consists of the four Black Country areas as well as Birmingham, Coventry and Solihull.
For the next three years he will preside over a board featuring council leaders' Roger Lawrence, Pete Lowe, Steve Eling and Sean Coughlan.
Together they will be tasked with delivering large scale infrastructure projects as part of a Government devolution deal that will see £8 billion pumped into the region to create new homes, jobs and improve transport networks.
Mr Street has pledged to use the business skills he learned at the retail giant to help drive investment and create jobs, and has also vowed to bring the Commonwealth Games to the region.
Elsewhere in the country it was a black day for Labour, with the party hammered by huge losses in the local council elections.
Labour had been widely predicted to win at least seven of the eight mayoral polls.
However Conservative Tim Bowles defied the odds to win the West of England mayoral election, while Tory Ben Houchen won in Tees Valley, where the turnout was just 21 per cent.
Other new Mayors include Labour's Andy Burnham, who was victorious in Greater Manchester, and Steve Rotheram - a close associate of Jeremy Corbyn - who won in Liverpool.