The 46-year-old former coca grower is set to become the first indigenous
head of South America's poorest country.
Official results are not expected before Tuesday, but exit polls gave Mr Morales more than the 50 percent of the vote needed to win.
"We have won," he shouted to thousands of cheering supporters at a rally in his Cochabamba stronghold.
Mr Morales claimed victory after his right-wing rival, Jorge Quiroga, a former
president, conceded defeat.
"A new page in Bolivia's history has been turned," Mr Morales told supporters, amid shouts of "Evo, president!"
The size of the victory was a surprise, as opinion polls before the election had given the head of the Movement Toward Socialism party only about 35 percent of the vote.
Mr Morales, an Aymara Indian from an impoverished family, who did not finish
high school, has vowed radical changes in the country.
The Morales campaign has been packed with anti-US slogans, and on election day, he vowed to cooperate closely with other "anti-imperialists".
He also reaffirmed his admiration for Cuba's communist President Fidel Castro.
Reaction
Cuba's state press said that Mr Morales had scored a "convincing" victory in front-page coverage of the election.
In Venezuela, President Hugo Chavez, another virulently anti-US leader, hailed the election, saying Bolivia "is writing a new page in its history".
Contentious policies
Mr Morales has pledged to increase state control over Bolivia's vast natural gas resources and to protect growers of coca, a traditional plant that forms the basis of cocaine.
He has said the multinational firms that control Bolivia's gas resources will have to split their profits with Bolivia, but he has not said how this will be carried out.
He has vowed however that Bolivia will not "seize or expropriate" the oil firms' property.
His policy on coca has also caused disquiet in the US.
He has insisted that he opposes cocaine trafficking but defends the right to grow coca, which is also a medicinal plant popular with indigenous people.
On election day he said under his administration, "there will be zero cocaine, zero drug trafficking, but not zero coca."
Washington has expressed concern about Mr Morales's pledge to end US-funded programs to eradicate coca growing.
"We expect whatever government comes next in Bolivia to honour those commitments that they have made to fight the production and transport of
illegal drugs," State Department spokesman Sean McCormack said before the election.
Intellectual vice president
While Bolivia's president-elect Evo Morales is a fiery left winger who did not finish high school, his vice president, Alvaro Garcia Linera, is a former guerrilla who studied in prison to become a radical professor.
Together Mr Morales and Alvaro Garcia Linera are called the "poncho and tie"
team and by critics the "the illiterate and the intellectual".
Mr Garcia Linera, 43, is the ideologue of the new administration.
His mission in this campaign has been to calm the fears of Bolivia's middle
classes who have been panicked by Mr Morales campaign slogans, such as "Power to the Indians", and who fear an orgy of nationalisation and higher taxes.
Mr Garcia Linera has said his alliance with Mr Morales is one of "the indigenous
class and the liberal intellectuals" of Bolivia.