Lee Myung Bak of the opposition conservative Grand National Party (GNP) was declared the victor in the South Korean presidential polls on Wednesday after scoring a clear margin over main challenger Chung Dong Young.
With more than 70 per cent of votes counted, Lee had tallied 47.5 per cent compared to 27.1 percent for Chung, the country's electoral commission said. Independent candidate Lee Hoi Chang was in third place.
Chung, of the government-aligned United New Democratic party, conceded defeat to Lee, saying he accepted the will of the electorate.
Lee said he wished to serve all South Koreans with a modest attitude and would engage in boosting the country's economy.
"I'll also work to promote harmony and integration of the divided society," said the former Seoul mayor and a senior business figure.
The presidential office in Seoul congratulated him on his victory.
Lee, who turned 66 on Wednesday, is set to become the first South Korean president to win a majority vote, according to Yonhap news agency.
The GNP victory ends a decade of liberal rule under President Roh Moo Hyun and his predecessor and mentor Kim Dae Jung.
As expected, turnout was low, with only 58 per cent of eligible voters casting ballots an hour before polls closed, the commission reported.
Lee, seen in South Korea as a political heavyweight and also known under the nickname "Bulldozer", held a comfortable lead throughout the campaign and his landslide victory was no surprise, despite an upcoming fraud investigation.
The parliament voted on Monday to reopen an investigation into claims that Lee, a former CEO of Hyundai Engineering and Construction, was involved in a 2001 stock-manipulation scandal, despite being cleared in early December of the same charges.
The incumbent Roh is ineligible to run for election, having served a five-year term. Lee, if officially elected, takes office on February 25.