Opposition conservative Kolinda Grabar-Kitarovic has been elected Croatia's first woman president.
Grabar-Kitarovic, an ex-foreign minister and former NATO official, won 50.4 percent of the vote, according to results based on more than 99 per cent of the ballots cast.
She won a tight run-off vote with a pledge to kickstart the ailing economy.
Her rival, centre-left incumbent Ivo Josipovic, garnered 49.6 percent of the vote, according to results released by the electoral commission.
The 46-year-old candidate of the main opposition HDZ party becomes the first woman to take the helm of the European Union's newest member.
She is also the first female head of state chosen by voters in the largely patriarchal Balkans region since Albania's Jatifete Jahjaga was elected by parliament in 2011.
Sunday's election for the largely ceremonial post was held as Croatia, which became the EU's 28th member in July 2013, grapples with a deep economic crisis.
Although presidential powers are limited in Croatia, Sunday's vote is seen as a key test ahead of parliamentary elections later this year in which Grabar-Kitarovic's HDZ is likely to make significant gains.