Francois Hollande was set to become France's first Socialist president in 17 years after routing the centre-right incumbent, Nicolas Sarkozy, in a bitter contest with far-reaching implications for Europe and the euro.
According to voting estimations based on a partial vote count from the TNS Sofres institute, Hollande won with 52 per cent to Sarkozy's 48 per cent.
"It is a great joy. It puts an end to 17 years of right-wing rule at the Elysee," Socialist Party spokesman Benoit Hamon told reporters shortly before the results were made public.
Hollande becomes France's second left-of-centre president since Francois Mitterand, who ruled until 1995. Sarkozy is the second sitting head of state since Valery Giscard d'Estaing to miss out on re-election.
Sarkozy's defeat signals the likely end of his political career. The 57-year-old trained lawyer had vowed to bow out of politics if defeated. He is the 11th eurozone leader ousted from power since the start of the currency bloc's debt crisis.
Even before the embargo on the announcement of results was lifted, tens of thousands of Socialist supporters, armed with results leaked by foreign media, were celebrating in the streets of Paris, outside party headquarters and at Bastille square, a symbol of revolution.
Hollande, who voted in his central rural stronghold of Correze, was to address supporters in the town of Tulle, where he was once mayor, before returning to Paris to join the party.
Sunday marked the climax of a long, emotionally charged campaign, in which Hollande campaigned as Sarkozy's "normal" antithesis, appealing for unity while Sarkozy courted far-right voters.
At around 81 per cent, turnout in the election was high.
Sarkozy played up his experience, saying that Hollande - who has never held a ministerial post - was unfit to lead the country at a time of crisis and that his tax-and-spend programme would take the country down the road of Greece or Spain.
Despite all pre-second round opinion polls showing him being beaten, he remained hopeful until the end that the "silent majority" of France would rally behind him.
But he went into Sunday's vote a lonely figure, without a single endorsement from any of the eight candidates knocked out in the first round on April 22. Hollande, by contrast, won backing from other leftist and centrist candidates.
The French election was being closely watched for its impact on the European Union and the euro.
Hollande has said that, if elected, he would renegotiate the European fiscal compact signed by 25 leaders to add chapters on growth and employment. German Chancellor Angela Merkel, who supported Sarkozy, has told him the pact is not renegotiable.
Sarkozy 'not to lead' right
Sarkozy urged his right-wing UMP party to remain united after his re-election bid was defeated Sunday, but warned he would not lead it into June's parliamentary elections.
"Stay together. We must win the battle of the legislatives. I will not lead that campaign," he told senior party figures as he read them a draft of his concession speech, according to political sources at the meeting.
The result will have major implications for Europe as it struggles to emerge from a financial crisis and for France, the eurozone's second-largest economy and a nuclear-armed permanent member of the UN Security Council.