Supporters shouting "Otto, Otto," had set off fireworks at his party’s headquarters, as early results had shown that he was leading.
But celebrations were premature as Colom had overtaken Mollina.
After polling stations had closed, observers said that were largely trouble-free, in contrast with a campaign plagued by violence and bloodshed.
More than 34,000 police and soldiers were on hand to provide security as voters cast their ballots in presidential, legislative and municipal elections.
During the campaign some 50 candidates, activists and others were killed.
On the eve of the election, there were allegations of fraud and some voters burnt ballot boxes in El Serinal just east of Guatemala city.
But international observers said there had been no reports of significant incidents on the polling day itself.Election promises
With more than 6,000 murders reported in Guatemala last year, security has been highlighted as a key issue, with candidates promising to crack down on crime.
Perez Molina, a former head of military intelligence during the civil war between 1960 and 1996, has capitalised on the violence with his "strong fist" message against crime and corruption.
He wants to deploy the army to crack down on crime. "Our proposal is to gradually increase the number of police," Perez Molina said on Friday before campaigning officially ended.
|Security was tight after an election campaign |
marred by violence and bloodshed [EPA]
"But until that happens, we are going to have to use the army to patrol the streets."
He supports the death penalty and has said the government should selectively declare a state of emergency in areas overrun by drug traffickers and tattooed street gang members, blamed for a wave of killings.
Much of the violence ahead of the elections is believed to have been carried out by drug gangs trying to force their congressional and local candidates into office.
In the eastern part of the country, several suspected drug dealers are running for public office in an effort to gain control over key trafficking routes. Poverty
In contrast to Perez Molina, Colom, a social democrat, has said he wants to tackle poverty as the root of crime.
He has said a vote for Perez Molina would be a step backward into the dark days of Guatemala's civil war that had killed almost 250,000 people.
A UN-backed report has blamed the army for 85 per cent of civil war killings.
"Guatemala was ruled with a 'strong fist' for 50 years," Colom said, referring to the country's military rulers.
"Guatemalans have to decide if we are to return to abuse and perversion of the law, or if we want to rely on the law to govern."
Colom's campaign has focused primarily on the need to clean up the police force and the judiciary.
Perez Molina and Colom had defeated the other 12 candidates, including Rigoberta Menchu, a Nobel peace prize laureate and Mayan activist. Menchu is the first Mayan woman ever to run for president in Guatemala where 42 per cent of the population is descended from the ancient civilisation.