|Yingluck Shinawatra said she was working on building a coalition government [Reuters]
The sister of Thaksin Shinawatra, the exiled former prime minister, has led Thailand's main opposition party to a landslide election victory.
Sunday's vote paves the way for 44-year-old Yingluck Shinawatra, who has never held office, to become this Southeast Asian kingdom's first female prime minister.
With almost all the votes counted, her Pheu Thai party had won a clear majority with 263 seats out of 500, well ahead of the ruling Democrats with 161, according to the Election Commission, which estimated turnout at 74 per cent.
Al Jazeera's Wayne Hay reports from Bangkok
Speaking on television, Abhisit Vejjajiva, the outgoing prime minister, said: "It is now clear from the election results so far that the Pheu Thai party has won the election, and the Democrat party concedes defeat.
"I would like to congratulate the Pheu Thai party for the right to form a government."
Abhisit resigned on Monday as leader of the Democrat party.
Meanwhile, Yingluck said she was working on building a coalition.
"I don't want to say it's victory for me and the Pheu Thai party but people are giving me a chance and I will work to my best ability for the people," she said at her party headquarters in Bangkok.
"While we are waiting for the official results, the Pheu Thai executive has already contacted and discussed with Chart Thai Pattana to work together."
Yingluck was referring to negotiations for a coalition with a smaller party.
Speaking from Dubai, Thaksin told a Thai broadcaster that he had called to congratulate his sister and cautioned her of "tough work ahead".
Sunday's vote was the first major electoral test for the Thai government since mass opposition rallies in Bangkok last year, which sparked a military crackdown that left at least 91 people dead.
Reporting from Bangkok, Al Jazeera's Wayne Hay said many Thais were taken aback by the scale of Pheu Thai's projected win. "Everyone is quite surprised, stunned - perhaps by these results," he said.
Thaksin, who has lived in exile in Dubai since being ousted by the military on charges of corruption in a 2006 coup, remains hugely popular among the country's poor. The elite, however, are wary of him.
Al Jazeera's Aela Callan said the reaction in the Red Shirt stronghold of Khon Kaen, northern Thailand, had been muted.
The Red Shirts, a protest movement which is particularly popular in rural Thailand, is loyal to her brother and has supported Yingluck's campaign.
"Far from jubilant scenes, what we've seen here is some cautious optimism," Callan reported, noting that all four of the movement's previous victories at the polls had been cut short, either by the military or through judicial means.
Pithaya Pookaman, who heads Pheu Thai's foreign relations, said a Pheu Thai landslide meant anti-democracy forces would have to "think very hard" before provoking a repeat of previous years' violence and election nullifications.
"We learned from our lessons. If the people give us a landslide victory; if the people give us an overwhelming victory, I'm sure the people who are trying to derail the election, who are trying to prevent democracy from working in Thailand, will have to think very hard," he said.
"I think the world opinion is upon them. The people have given their answer, their decision, so I think it's a matter of taking that into consideration and not derailing the democratic process."
Al Jazeera's Hay said negotiations to ensure a smooth transition were taking place behind the scenes, and that many Thais are hoping the election might lead to political stability.
"But, as we know in Thai politics, these deals can fall over very quickly," he said.
Some Thais, especially females, see Yingluck's victory as a big step for women in a country where they have struggled for equal representation in government.
"I've always wanted to have the first lady prime minister," Areerak Saelim, 42-year-old owner of a sunglass shop in a Bangkok market.
"I've seen too many men failing to run the country. Maybe this time, things will be different. What women are - and men aren't - is meticulous. I'm pretty sure she can do the job based on her age and successful career."
But others questioned whether Yingluck was, in fact, her own woman.
"It's obvious who she represents ," Puttasa Karnsakulton, a 37-year-old clothing shop owner, referring to her brother.
Supong Limtanakool, the chairman of the Centre for Strategic Studies at Bangkok University, told Al Jazeera that while Yingluck's victory was not surprising, the substantial margin by which she won was.
Supong said the incumbent's loss could, in part, be attributed to a cooking oil shortage and high food prices.
His government's apparent indifference to the plight of Thais during recent natural disasters had also helped to cost him support.
"[Populations affected by flooding] have never seen any government representative going to visit them or to see what they can do [for] the people," Supong explained.