Thai Prime Minister Abhisit Vejjajiva conceded that Yingluck had won the nation's election and congratulated her for being the first female prime minister.
Yingluck, 44, the telegenic youngest sister of former premier and telecoms billionaire Thaksin Shinawatra, who is on a self imposed exile in Dubai and has been out of Thailand since the coup five years ago when he was ousted.
Yingluck dubbed as Thaksin's political proxy will be the 28th prime minister of the country, which has a history of military coups and political instability.
With over 90 per cent of votes counted, Puea Thai had won 260 seats out of 500. It is well ahead of the Democrats with 163, according to the Election Commission.
"The outcome is clear -- Puea Thai has won the election and the Democrats are defeated," Abhisit told supporters at the party's Bangkok headquarters.
Exit polls had shown that Yingluck's party may take more than 300 of the 500 seats in the House of Representatives enabling the party to form its own government without looking for coalition partners.
Exit polls showed that Yingluck's Pheu Thai party with a wide lead over Abhisit's Democratic Party.
"Thank you to the people who came out to vote," the beaming businesswoman said after victory at the polls.
The general elections were the first major electoral test for the elite-backed government since mass demonstrations by Thaksin's "Red Shirt" supporters last year paralysed Bangkok and unleashed the worst political violence in decades.
Today's elections may bring to an end the last few years of unrest between supporters of Thaksin and the Democrats and Royal supporters. The Pheu Thai party is allied with Thaksin Shinawatra, who was ousted as prime minister the 2006 military coup.
Tensions between the Democratic Party and the Pheu Thai party erupted last year, with protests against Abhisit's government leading to a military crackdown resulting in 90 deaths and hundreds injured.
Abhisit became the prime minister after he was put in office in 2008 by a parliamentary vote after the court dissolved the previous pro-Thaksin ruling party.
However, it is not yet clear what will be the status of Thaksin, who faces an arrest warrant here.
Meanwhile, Thaksin told Thai television stations from Dubai that the Pheu Thai Party will not form a one-party government even if it has enough seats and will invite other parties to join in a coalition.
He said if Pheu Thai was victorious, as projected by exit polls, his sister Yingluck Shinawatra would certainly be prime minister, online Bangkok post newspaper said.
"What is more exciting is the voter turnout is high, showing that the Thai people want to see democracy and national reconciliation," Thaksin said.
The fugitive politician believed talks between parties to form a government had begun, pending the official results of the election.
His advice was for Pheu Thai to first concentrate on national reconciliation, then restore the economy and ,look to good governance in the bureaucracy.
Thaksin admitted he wanted to return to Thailand as soon as possible, but said everything must be appropriate.
With nearly 80 percent of votes counted, Yingluck's party was projected to win 255 seats with Abhisit Vejjajiva's Democrat Party getting 164, according to the Election Commission.
Exit polls had predicted an overwhelming victory for the 44-year-old business executive and her Pheu Thai Party.
Her brother Thaksin won landslide victories in 2001 and 2005 polls and is adored by the poor in the countryside.
The election is Thailand's 26th since it became a democracy in 1932, and has experienced 18 military coups the latest in 2006, which overthrew Thaksin and his Thai Rak Thai party (TRT).
The party was dissolved for electoral fraud after the coup and its latest incarnation is the Pheu Thai party.
Src.http://www.defence.pk/forums/world-affairs/118333-thailand-gets-its-first-woman-prime-minister.html
