But despite a strong national swing towards Rudd's party, observers say the result will hinge on a relatively few districts with both sides saying they expect a close result.
Under Australia's Westminster-style parliamentary system, Labor needs to gain 16 more seats in the lower house in order to gain a majority and form a government.
On Thursday Howard's re-election hopes were dealt an embarrassing blow after it emerged that members of his own Liberal party had been behind the distribution of bogus pamphlets attempting to link Labor to support for convicted terrorists.
Kevin Rudd (Labor party)
First elected to parliament in 1998
Vocal opponent of war in Iraq and has vowed to pull out Australian troops
Has promised to ratify Kyoto treaty on climate change
A former diplomat and fluent Mandarin speaker he has made much of international experience, promising to strengthen Australia's ties with Asian neighbours
John Howard (Liberal party)
Has led conservative coalition to four successive election victories since 1996, but says he will retire mid-term if he wins re-election
Seen as key ally of President Bush and has refused to set timetable for Iraq withdrawal
Campaigning on record of strong economic growth under his leadership
Has refused to ratify Kyoto treaty saying any pact on global warming must include emissions targets for developing countries
Two members have been expelled over the scandal, the party said, and the issue forced Howard on to the defensive in the crucial final days of campaigning.
Al Jazeera's Sydney correspondent Dan Nolan says despite the scandal Howard was still confident of winning.
"As we get closer people are saying 'the country is headed in the right direction. why should we change the government?'," Howard told supporters on Friday.
"Why put at risk the fundamentally right direction in which the country is heading."
On the same day, Rudd offered Australians a new leadership and a positive future plan, saying the best days of the present government "now lie behind it".
Opinion polls on the eve of elections showed Howard trailing his opponent who seemed firmly heading toward a clear victory.
Our correspondent says if the opinion polls prove to be right, Howard will go down in Australian political history as someone forced out by the people after he clung on to power for too long.
On Friday, several major newspapers called for Howard's removal and openly endorsed Labor's leadership bid.
Swing in support
The headline on the Sydney Morning Herald's front-page read "Howard needs a miracle", reporting on a Nielsen opinion poll showing him heading for a landslide defeat by Rudd.
Its editorial said the government's unwillingness "to respond to the new and growing challenges" facing the country is forcing people to look elsewhere.
The Australian, a national broadsheet owned by Rupert Murdoch, the Australian-born global media mogul, also endorsed Labor - the first time the paper has done so since 1972.
"John Howard and his team have a proven track record but, to us, they have run out of energy," the paper said. "We recognise no change is free of risk, but we recommend a vote for Kevin Rudd."
Sydney's mass circulation tabloid The Daily Telegraph also switched camps to Labor for the first time in 10 years, praising Howard's rule but conceding he had reached his "use-by date".
But support for Howard came from the Herald-Sun in Melbourne, the biggest-selling newspaper, and the business-focused Australian Financial Review.
"Labor's regressive workplace plans overwhelm the appeal of Mr Rudd's reforms in federalism, health and education," the Review said.
"If, as the polls predict, Labor wins the election, Mr Rudd will have our full support to implement these reforms. But the Howard government remains better qualified to plot a safe passage through choppy seas."
Voters will choose candidates in 150 seats in the House of Representatives, the lower house of parliament, and 40 out of 76 seats in the Senate, or upper house
Government formed by party or coalition with majority in lower house
Some 13.5 million of Australia's 21 million population are registered to vote
Voting is mandatory and failure to vote incurs a fine
Constituencies vary dramatically in size from Wentworth in Sydney which covers just 26 km sq, to Kalgoorlie in Western Australia, which covers 2.2 million km sq