Romania's prime minister has conceded defeat in an extremely close presidential runoff against an ethnic German Transylvanian mayor.

Victor Ponta had been the favourite to win, but was narrowly edged out by Klaus Iohannis, the mayor of the city of Sibiu who promised a crackdown on corruption.

Ponta said on Sunday night he had personally congratulated Iohannis.

"We are a democratic country," Ponta said outside the headquarters of his Social Democratic Party two hours after polls closed. "The people are always right."

With one-third of the votes counted, Iohannis was leading with 56 percent of the vote, while Ponta had 44 percent, authorities said early on Monday.

Official results are expected on Monday.

Tight race

The prime minister, was slightly ahead according to two exit polls which gave him 50.7 percent and 50.9 percent of the vote. But three other surveys put Iohannis narrowly in the lead.

The exit polls do not take into account the votes cast in the second-round runoff by Romanians abroad, seen as more likely to vote for Iohannis.

"Thanks to you, another kind of Romania is beginning," Iohannis said on his Facebook page.

"The Romania we want is not one of conflict or revenge.''

"Your vote and your word are its foundation. Let's put the first brick onthis building and let it be a lasting one!'' he added.

Iohannis praised voters, saying they had come out "of their houses to defend the right to vote" 25 years after the Romanian revolution.

Ponta led by 10 percentage points in the November 2 vote. He has the support of the influential Romanian Orthodox Church and has received a boost from the strengthening economy.

The winner will replace President Traian Basescu, who is stepping down after 10 years.

In Romania, the president is in charge of foreign policy and defence, and names key prosecutors and the chiefs of intelligence services.

Source: Agencies