"We did it!" opposition leader Helle Thorning-Schmidt told ecstatic supporters, as near final results showed her bloc had won Thursday's vote.
"We made history today," added the the Social Democratic leader destined to become Denmark's first woman head of government.
After 99.6 per cent of votes had been counted, it was clear the centre-left bloc headed by Thorning-Schmidt had taken 89 seats in Denmark's 179-seat parliament against 86 for exiting Prime Minister Lars Loekke Rasmussen's centre-right government and parliamentary supporters.
"Earlier this evening I called (opposition leader) Helle Thorning-Schmidt. I congratulated her and told her she now has the chance to form a new government," Rasmussen told his disappointed supporters.
Rasmussen, whose Liberal Party remained the country's biggest and gained a seat from the 2007 election, to 47, insisted his opponent's government would not last.
"This evening I hand the keys to the prime minister's office to Helle Thorning-Schmidt," he said, before adding: "Dear Helle, look after the keys, because you're only borrowing them."
He was expected to submit his resignation to Queen Margrethe later today.
A total of 90 seats are needed for an absolute majority in the 179-seat parliament.
Four seats reserved for Denmark's autonomous territories Greenland and the Faroe Islands had yet to be officially tallied and were not yet included in the score, though they were unlikely to reverse the results, according to observers.
At the 2007 elections, the territories handed three votes to the centre-left and one to the centre-right.
The centre-right defeat spells an end to the powerful influence wielded by the populist, anti-immigration Danish People's Party