Viktor Orban, who has ruled Hungary for 16 years as a self-described "thorn" in the EU's side and a defender of "illiberal democracy", on Sunday conceded defeat to conservative Peter Magyar, who won a thumping majority in parliamentary elections.

Orban's defeat, in a vote that saw a record turnout, dealt a heavy blow to nationalists, including US President Donald Trump who supported him.

It also deprives Russian President Vladimir Putin of his most sympathetic ear inside the European Union.

Tens of thousands of jubilant supporters of Magyar's Tisza party cheered the results outside the party's election headquarters on the banks of the Danube in Budapest, waving Hungarian flags and dancing, as car horns sounded in the capital.

"I feel fantastic!" Zoltan Sziromi, a 20-year-old student, celebrating in the crowd, told AFP.

"We've finally got rid of that system, and it was about time."

Magyar, who arrived waving the Hungarian flag, told the cheering crowd that voters had "liberated Hungary", calling his party's win a "miracle" in the central European country of 9.5 million people.

"Today, the Hungarian people have said 'yes' to Europe," the 45-year-old former government insider and political newcomer told supporters.

He promised to "restore the system of checks and balances..., guarantee the democratic functioning of our country" and put Hungary "back on track".

Acknowledging it was an "enormous" task, he called for unity, saying the victory belonging to "all Hungarians".

- 'Unambiguous' -

With 98.15 percent of precincts counted, Tisza secured a two-thirds majority with 138 seats in the 199-seat parliament on 53.6 percent of the vote, according to official election results. Orban's Fidesz took 55 seats on 37.9 percent of the vote.

Earlier Sunday, Orban, 62, conceded defeat.

"The election results, though not yet final, are clear and understandable; for us, they are painful but unambiguous," Orban, 62, told reporters.

"We have not been entrusted with the responsibility and opportunity to govern. I congratulated the winning party," he said.

Turnout in the election reached a record 79.50 percent, according to the near-complete vote count.

Orban, who was seeking a fifth straight term, has transformed his country into a model of "illiberal democracy", clashing with Brussels over rule-of-law issues, as well as over support for war-torn Ukraine.

Magyar burst onto the scene just two years ago, promising to fight corruption and offering better public services. He drew support against a backdrop of economic stagnation, and despite an electoral system skewed in favour of Orban's Fidesz party.

Congratulations for Magyar poured in from around Europe, with France and Germany urging him to work together for a "strong Europe".

Ukrainian President Volodymyr Zelensky pledged to work with Magyar "for the benefit of both nations, as well as peace, security, and stability in Europe".

"Hungary has chosen Europe," head of the European Union, Ursula von der Leyen, posted on X.

Ahead of the vote, both Orban's and Magyar's camps had alleged foreign interference during the campaign.

US Vice President JD Vance visited Hungary last week to rally with Orban, attacking the alleged interference in Hungary of Brussels "bureaucrats".

Trump had promised to bring US "economic might" to Hungary if Orban's party secured victory.

- 'Defeat for authoritarianism' -

Neera Tanden, president and CEO of the Center for American Progress, said Oran's defeat was a "major blow to those who have looked to Viktor Orban's corrupt model as a blueprint -- including Donald Trump himself.

"This is a resounding defeat for authoritarianism that echoes far beyond Hungary's borders," Tanden added.

Orban had focused on making Ukraine the central topic of his campaign, portraying the neighbouring country, which is fighting off a Russian invasion, as "hostile" to Hungary.

He had also vowed to continue his crackdown against "fake civil society organisations, bought journalists, judges (and) politicians".

Fidesz supporters gathered for the results-watching event in Budapest were stunned.

"I am a Fidesz supporter with all my heart," Juliana Varga Szabo, a 58-year-old teacher, told AFP, tears in her eyes, saying that perhaps she had been living in a "bubble".

"Now that bubble is burst. I won't change my values. We'll just have to see what the future brings," she added.