I would make a complaint to his boss

This is about the height of unfairness, and I don’t blame you for being upset. My experience is that it is very difficult to get a meaningful and major job change with your current employer. An outside employer is usually more likely to offer a significant job upgrade than your current one. The exception to this is a case where they expand the responsibilities and pay somewhat of your current job, but you don’t give up your old job and take on a whole new job. When a firm hires an outside worker to fill an opening that’s one hire. When a firm promotes from within that’s a transfer of one employee plus the old job now vacated has to be filled so that’s effectively two hiring decisions to make. So in many cases it’s easier, though less fair to internal applicants, to hire from outside - Assuming they hire someone competent for the job. What can you do - Not much. It won’t help to actively sabotage the new hire or your boss and could ultimately get you fired. You have to act professionally despite the unfairness of the situation. I would advise you start looking outside for the position you want. You already went through much of the preparation and ground work for an interview in applying for and negotiating for the internal promotion, so that’s useful practice. The main thing that is different is that your prospective new employer won’t already know you, so you have to be able to introduce yourself and your abilities to them fresh. On the other hand they won’t have already pigeon-holed you in their minds as your current position, so that’s an opportunity for you. If you were potentially a good match for an internal promotion, then you are a good match for an external promotion.

hopefully she'll tank at the job and then you'll get after all.

I'm sorry this happened to you. Is looking for a new job an option?