Athens, Greece (BBN)-Alexis Tsipras has hailed a "victory of the people" after his left-wing Syriza party won Greece's fifth election in six years.
He said Greeks faced a difficult road and that recovery from financial crisis would only come through hard work, reports BBC.
The conservative New Democracy party earlier conceded defeat.
With 60 per cent of votes counted, Syriza is projected to be just short of a majority but the Independent Greeks have agreed to join a coalition.
The latest figures give Syriza 35 per cent of the vote, compared with New Democracy's 28 per cent.
The far-right Golden Dawn is set to be the third biggest party, with 7.1 per cent of the vote.
The snap election was called after Syriza lost its majority in August. This followed the signing of an unpopular new financial bailout deal with international creditors.
Turnout in this poll was just over 55 per cent, down from 63 per cent in January and low by Greek standards.
HUGGED
Tsipras said his decision to call an early election was vindicated and that he had been given a clear mandate.
He told thousands of jubilant supporters in central Athens: "In Europe today, Greece and the Greek people are synonymous with resistance and dignity, and this struggle will be continued together for another four years.
"We have difficulties ahead, but we are also on firm ground. We won't recover from the struggle by magic, but it can happen with hard work."
Tsipras was joined on stage by Panos Kammenos, leader of the the nationalist Independent Greeks, who also entered a coalition with Syriza after the previous election in January.
"Together we will continue the struggle we began seven months ago," Tsipras said.
New Democracy leader Vangelis Meimarakis earlier conceded defeat to Tsipras, saying:
"I congratulate him and urge him to create the government which is needed."
The latest projection gives Syriza 145 seats in the 300-seat parliament, with New Democracy on 75.
This is only four fewer than Tsipras's thumping victory in January, but again leaves him just short of an absolute majority.
But the Independent Greeks are likely to get 10 seats.
GREECE'S TURBULENT YEAR
29 Dec: Greek parliament fails to elect president, leading to snap elections a month later
25 Jan: Leftist Syriza party's Alexis Tsipras elected PM on an anti-austerity manifesto
24 Feb: Greece's European lenders agree to extend its second bailout by four months
Jun: Marathon talks take place to avoid Greece bankruptcy and possibly leaving the eurozone. PM Tsipras calls a referendum on a possible bailout agreement
5 Jul: Greek voters overwhelmingly reject terms of third EU bailout in referendum vote
14 Aug: Greece agrees €85bn (£60bn) bailout deal with its creditors - its third in five years - allowing tax hikes and new spending cuts. Tsipras resigns a week later clearing the way for snap elections in September, as he seeks a new mandate
20 Sept: New Democracy concedes election defeat to Syriza
Tsipras, the man who risked Greek future in euro
Grey line
Tsipras seemed to lose popularity when signing the bailout deal, shortly after holding a referendum in which more than 60 per cent of voters rejected the austerity measures creditors wanted to impose.
In interviews leading up to the election, Tsipras said he had put his country above his party.
He said that had he not agreed to the three-year bailout, Greece would probably have had to leave the eurozone.
The decision led to a split within Syriza, with rebels breaking off to form the new Popular Unity party, which advocates withdrawal from the euro.
Initial results suggest the party may not win any seats in parliament.
BBN/SK/AD