Sinn Féin President Gerry Adams also congratulated Mr Varadkar, but warned that Fine Gael under his leadership will be dragged further to the right.
Mr Adams said that ordinary people will suffer as a result.
He said: "I congratulate Leo Varadkar on his appointment as Fine Gael Leader. However his elevation to the position of Taoiseach is another matter entirely.
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"For a party that has been preaching democracy to other parties for three weeks now the nature of this election has been very undemocratic. Some 65% of the membership voted for Leo Varadkar’s opponent yet he managed to come through as the winner.
"Leo Varadkar is a Tory. Fine Gael will be dragged even further to right under his leadership and that can only mean further hardship for ordinary people.
"Leo Varadkar as Taoiseach will mean greater disadvantage. It will mean more people locked out of the housing market. It will mean the growth of precarious work and poverty wages."
The Sinn Féin President claimed it will mean a "widening of the gap between the rich and the poor".
He said: "It is now over to Micheál Martin to see if he will become the first leader of Fianna Fáil to elect two Fine Gael Taoisigh.
"The fact is that Leo Varadkar has no mandate to lead this state. In fact, he barely has a mandate to lead his party but that is up to them. He represents only a minority of Fine Gael.
"He should call a general election immediately and seek a mandate from the people.
"Minister Varadkar’s expressed position in relation to Designated Special Status for the North is very positive and I hope he will now move to make this his party’s position and carry it into an election."
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