Erdogan had 52.5 percent, with 98 percent of the votes counted in his bid for a presidency with broadly expanded powers, according to Anadolu Agency's unofficial results.
Turkey's national electoral board has declared Erdogan the victor of the country's presidential election with an absolute majority of valid votes.
The USD/TRY is on the rise for Monday, up over 1.4% from the day's early low after surprise results from the Turkish election put the incumbent Erdogan back in the seat of power. "We will count the votes right through until the morning".
The AKP won 293 seats in the 600 MP chamber but the MHP did far better than expected, winning 50 seats and giving their alliance a clear majority, according to results published by Anadolu. "If Ince wins, the courts will be independent", said Ince, adding he would lift Turkey's state of emergency within 48 hours of being elected.
Five candidates ran against Erdogan, including the jailed ex-leader of the pro-Kurdish Peoples' Democratic Party (HDP), Selahattin Demirtas. In a milestone, a pro-Kurdish group, HDP, gained the 10 percent of the vote needed for representation in Parliament.
Iranian President Hassan Rouhani offered his "sincerest congratulations" to Erdogan.
The presidential and parliamentary elections, held more than a year early on Sunday, complete NATO-member Turkey's transition from a parliamentary system of government to a presidential one in a process started with a referendum last year.
The win allowed Erdogan to escape a run-off against his closest rival, Muharrem Ince, who posed the greatest threat to ending Erdogan's 15-year political dominance.
Russian President Vladimir Putin personally congratulated Erdogan in a telephone call.
Erdogan, 64, the most popular but also the most divisive politician in modern Turkish history, later waved to cheering, flag-waving supporters from the top of a bus in Istanbul.
The vote will complete Turkey's transition from a parliamentary to a new executive presidential system, a move approved in a referendum a year ago.
In a speech at CHP headquarters on Monday, Ince said that despite suspicions of fraud, he nonetheless recognised Erdogan's victory: "Did they steal votes? Yes".
"Turkey is staging a democratic revolution", he told reporters after casting his own vote in Istanbul.
"We always vote for our leader Recep Tayyip Erdogan", he said while navigating his cab through traffic.
He is loved by millions of devoutly Muslim working class Turks for delivering years of stellar economic growth and overseeing the construction of roads, bridges, airports, hospitals and schools. There are several problems to face: the decline of the Turkish lira, a massive 12 per cent rate of inflation and the perception that Erdogan is curtailing the central bank's independence.
Buoyed by opinion polls, opponents of Turkish President Recep Tayyip Erdoğan believed they had a realistic chance of unseating him-or at least reducing his dominance in Sunday's elections.
He brought forward the elections from November 2019, but he reckoned without Ince, a former physics teacher and veteran CHP lawmaker, whose feisty performance at campaign rallies has galvanized Turkey's long-demoralized and divided opposition.
The restrictive legal framework and powers granted under the ongoing state of emergency restricted the freedoms of assembly and expression, including in the media, said the observers.
Luxembourg's foreign minister, Jean Asselborn, said Monday it was now up to Erdogan to decide whether Turkey's relations with the European Union will improve. But after a failed coup attempt in 2016, the illiberal trend accelerated.