The opposition Democratic Party of Japan has swept aside the the long-ruling conservative party in a landslide election victory, exit polls suggest.
The party, led by Yukio Hatoyama, was set to win more than 300 seats in the 480-seat lower house of parliament, according to exit polls of several television stations.
Japan's defeated Prime Minister Taro Aso said he would resign as head of the Liberal Democratic Party (LDP). He told public broadcaster NHK that he had to take the responsibility for the result.
The LDP has governed Japan for all but 11 months since 1955.
Mr Hatoyama said people were fed up with the governing party, the BBC reports. His party has said it will shift the focus of government from supporting corporations to helping consumers and workers.
He must now steer the world's second biggest economy back to sustainable growth. Japan is suffering record unemployment and its economy is struggling to emerge from a bruising recession.
The BBC reports the democratic party plans to forge a diplomacy less subservient to the United States and to improve relations with its Asian neighbours.
The party has also promised to expand the welfare state - even though Japan is already deeply indebtted and the rapidly ageing population is straining social security budgets.
Mr Hatoyama, the wealthy heir to an industrial and political dynasty, is due to announce a transition team on Monday and is expected to be confirmed as prime minister when parliament meets in about two weeks.
His Cabinet is expected to be in place by then, and his party is also in coalition talks with two smaller opposition parties.
