The League is closing in on 18 percent, overtaking the pre-election coalition leader and media mogul Silvio Berlusconi'sForza Italia (Go Italy) party, which has collapsed to 14 percent.
With the bloc's third-largest economy seemingly facing prolonged political instability, the anti-immigrant League claimed the right to rule after its centre-right alliance won the largest bloc of votes.
Economic policy has been a key battleground but observers say they have heard more from parties about pensioners than youths, which could be due to young voters' high vote abstention rates.
The downfall of the Democratic Party comes at a time when Italy reels under anti-immigrant and far right wing wave.
"Berlusconi confirms that in politics there is only one sure thing: soon or late everybody loses", Filippo Taddei, professor of worldwide finance at SAIS Johns Hopkins University, told The National.
The president and his team will speak to party leaders over the coming weeks, urging them to put the tensions of the campaign behind them and seek ways to form a majority, the official said.
"It is too early to tell whether this is the end of Berlusconi's career, but it's obvious that he will not be around forever", Adriano Bosoni, senior Europe analyst for global intelligence firm Stratfor, told The National.
But Luigi Di Maio, leader of the anti-establishment 5-Star Movement, declared his party "the winners", after obtaining alone almost 33% of the vote, but M5S would also need to form alliances in parliament to gain a majority.
"Government usually moderate people", he said.
The 5 Star Movement, a populist anti-EU party, received the largest percentage of the votes, 32%.
The position of the defeated Democratic Party (PD), which led the outgoing government, could yet prove pivotal because it will have numbers in the new parliament to become prospective kingmaker for either the right or 5-Star. Luigi Di Maio's attempts to pose as a credible Prime Minister and build a government team during the campaign were often met with incredulity and a lingering sense of artifice.
(Both the Five Star Movement and the League have argued against union sanctions on Russia.) Italy is not likely to quit the union or drop the euro, but a government hostile to both is a headache to Brussels and the deeper integration championed by President Emmanuel Macron of France and Chancellor Angela Merkel of Germany. Whether this happens depends largely on how much Mr Di Maio is willing to give.
Should the M5S stick to its old principles and not try to form a coalition, it would leave the path completely free for Salvini. Fortunately, that appears less than likely, for now; the two parties have very different profiles, and Salvini, who is allied with Berlusconi and other far-right parties, suggested he wasn't interested. The counts are still finishing as I write but we can see the picture: the old guard has been rejected in favour of something new.
Finally, there could be a stalemate if no clear majority emerges.
Projections of the effect on parliament, which could yet prove unreliable because of Italy's new and complex electoral system, showed it to be hung, with the M5S occupying more than a third of the seats in both houses; able to block any government it opposed.
Commentators said any compromise would be far from easy and would take time, at least until newly-elected lawmakers meet for the first time on 23 March. "The most important takeaway is that if you add the polling numbers of other center-right and populist parties in Italy, that number rises to 65%, or nearly two-thirds of the country voting against the political establishment".