Ayatollah Mohammad Reza Mahdavi Kani, a veteran conservative cleric, was elected as the new chairman of the Assembly of Experts after Rafsanjani withdrew his candidacy, the semi-official Mehr news agency reported.
Rafsanjani was stripped of his role as a Friday prayers leader after criticizing a crackdown on opposition protests after President Mahmoud Ahmadinejad's disputed 2009 re-election. He remains chairman of the Expediency Council, a committee which arbitrates disputes over legislation among state bodies.
Rafsanjani had chaired the assembly since 2007. The elected body of clerics appoints, supervises and has the theoretic power to dismiss the Supreme Leader, Ayatollah Ali Khamenei.
The defeat was a blow to Rafsanjani's attempt to play a bridging role between dominant Islamic hardliners and the increasingly marginalized reformist opposition.
It also removes him from a potentially pivotal position in shaping the eventual succession to Khamenei, who is 71.
Hardline media had welcomed the possible nomination of Mahdavi Kani.
The defeat for one of the great survivors of Iranian politics since the 1979 Islamic revolution highlighted how opponents to hardline Ahmadinejad are being isolated and sidelined.
Iran's Rafsanjani loses post as chair of state body
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