Donald Tusk will be the first Polish prime minister since the fall of communism more than two decades ago to rule for a second consecutive term after his centre-right Civic Platform trounced rivals in an election, cheering the markets.
With 64 per cent of the votes counted, Mr Tusk's pro-business party had won 37.5 per cent of votes in yesterday's election, short of an absolute majority but far ahead of Jaroslaw Kaczynski's nationalist-conservative Law and Justice party on 30.6 per cent.
Financial markets will welcome Mr Tusk's victory, which points to four more years of relative political and economic stability in the European Union's largest eastern member state at a time of deepening crisis in the euro zone.
The Polish zloty edged up 0.1 per cent in early trade today, while other regional currencies shed as much as 0.9 per cent.
Soon after exit polls indicated a decisive win when the polls closed last night, Mr Tusk swiftly claimed victory and Mr Kaczynski conceded defeat.
Although the partial results showed PO with a smaller share than the exit polls, the party and its preferred coalition partner, the Peasants' Party (PSL), would still together have enough seats to win a small majority in the Sejm lower house.
"From the point of view of the markets, this is very good news. Investors worried that we could see a coalition made up of three parties," said Ernest Pytlarczyk, chief economist at BRE Bank.
The leader of the rural-based PSL, Waldemar Pawlak, signalled he was ready to forge a new coalition with Tusk.
"The ruling party and coalition for the first time in Poland's post-communist history has been re-elected and that shows the consolidation of democracy in Poland," said Jacek Raciborski, a political scientist at Warsaw University.
"Only the low turnout is worrying," he added.
About one in two eligible voters took part in the election, in which a return to power by Mr Kaczynski would have threatened relations with Germany and Russia and worried investors.
The PAP state news agency quoted a senior PO politician as saying Mr Tusk and Mr Pawlak might yet fall short of a majority and Civic Platform might also try to lure members of the Democratic Left Alliance (SLD) into a new coalition.
The SLD, heir to the once-mighty Communist Party, took a surprisingly poor 8.2 per cent, according to the exit poll, while Mr Pawlak's PSL secured 9.5 per cent.
The final tally could show an even better result for Mr Tusk's party, as the election commission usually includes larger cities, which tend to favour PO, towards the end of its count.
The outgoing coalition has presided over four years of strong economic growth, steering Poland smoothly through the 2008-09 global financial crisis without dipping into recession.
Its victory ends a string of defeats for ruling parties in elections in EU member states this year, including in Portugal, Latvia, Denmark and Ireland.
PO has pledged more cautious reforms aimed at reining in the public debt and budget deficit, expected to reach 53.8 per cent and 5.6 per cent respectively this year.
It also wants to continue a privatisation programme set to net 15 billion zlotys for state coffers in 2011 and to pursue closer ties with Poland's EU partners.