A senior LDP official acknowledged that the party was headed for a "historic defeat".
"The predictions by the media were shocking. We had doubts, but now I think they are becoming a reality," Yoshihide Suga, the deputy chairman of the LDP's election strategy council, said.
Al Jazeera's Steve Chao, reporting from the capital, Tokyo, said that the exit poll results were "not much of a surprise".
"The surveys that were coming out in the early part of this week suggested that the LDP would be losing just about that many seats," he said.
"It is a very strong indication of voter sentiment, a very, very strong vote against the LDP.
"The challenge for the DPJ, if they actually win this number seats, is how will it govern and how quickly will it be able to move to ensure confidence remains with them.
Yoshihiko Noda, the Democrats' deputy secretary-general, achknowledged that there was a task ahead for the party.
"I'm happy, but at the same time I'm feeling a sense of big responsibility," he told TBS television.
Japan's economy came out of recession in the second quarter, mostly because of short-term stimulus packages in action around the world, but the jobless rate rose to a record 5.7 per cent in July.
Under a mantra of "Putting People's Lives First", the DPJ has offered a platform heavy on social-welfare initiatives, including cash handouts for job seekers in training and families with children.
It also has to tackle the problems caused by an ageing population. More than 25 per cent of japanese will be 65 or older by 2015 inflating social security costs.
Masura Tamamoto, a senior fellow at the World Policy Institute in Tokyo, said: "People here are voting for the DPJ to change the government so their lives don't have to change.
"There's really not much difference between the LDP and the DPJ, no ideological differences, no vision for a different type of society," he told Al Jazeera.
|High turnout was expected among Japan's
103 million eligible voters [EPA]
"The change is about government efficiency, its about how well you can run the government. The LDP had its chance for about 20 years and the economy has been going down. People want a secure a predictable life."
The LDP has ruled for all but 10 months since it was founded in 1955, but the DPJ already controlled the less powerful upper house of parliament following elections in 2007.
In the outgoing lower house of parliament, the LDP had 303 seats to the DPJ's 112.
Tobias Harris, a Tokyo-based political commentator and blogger, said that changes in the two parties over the past four years had worked in favour of the DPJ.
"The LDP has reverted to the party that it used to be and the DPJ has become a much more active party, a much more disciplined party, a party that people could trust with government," he told Al Jazeera.
"If you ask voters they are prepared to trust the DPJ once, but only once.
"The DPJ has really worked at finding candidates who can speak to voters, who are skilled at policy, who actually make the party look young, exciting and vital. That is a big part of the story of why the DPJ is set to win today."