Kevin Rudd has conceded defeat in the election and revealed he will not stay on as Labor leader.
The outgoing prime minister received a rock star welcome as he took to the stage at a Queensland Labor party function to admit the election was lost.
A grinning Mr Rudd received high fives and applause from a throng of supporters, who chanted "Kevin, Kevin" as he made his way through the crowd at the Gabba in Brisbane.
"Geez I thought we'd lost," Mr Rudd quipped.
"We fought the good fight as the Australian Labor party,” he said, flanked by his family including wife Therese Rein.
"Tonight is the time to unite as the great Australian nation, because whatever our politics may be we are all first and foremost Australian.
"The things that unite us are more powerful than the things that divide us."
Moments earlier, Mr Rudd phoned Tony Abbott to congratulate him on his win, which will see the Coalition return to government with as many as 90 seats.
The Labor faithful booed as Mr Rudd confirmed his second time as PM, which commenced when he ousted Julia Gillard in June, was over.
"As prime minister of Australia, I wish [Tony Abbott] well," Mr Rudd said.
"I wish his government well for the great and difficult challenges that lie ahead for Australia."
The election was called in favour of the Coalition at 9.15pm when it was confirmed the opposition had won 76 seats – the magic number needed to form government.
Vote counting continues but the Coalition looks to be returned to government in a landslide victory.
Describing Labor as a "viable fighting force for the future", Mr Rudd said despite predictions of annihilation his party had retained all its seats in Queensland.
"I know Labor hearts are heavy across the nation tonight. I accept responsibility, I gave it my all but it was not enough for us to win."
Mr Rudd looks likely to retain his seat of Griffith despite predictions he would be unseated.
But he will not continue on as leader of the Labor part, a decision he said was made “with a heavy heart”.
Despite a stinging defeat, the prime minister said he believed Labor could still make the community a better place.
"We have always, always risen from defeat. To renew out party with fresh vigour and new ideas for the future. And we will do it again.”
Read Tony Abbott's victory speech here.
Author: Matthew Henry, Approving editor: Fiona Willan