"Thank you to the many people who gave us their vote, who trusted us to continue leading New Zealand's recovery," she told cheering supporters, adding that her centre-left Labour Party had seen its highest level of support in at least 50 years.
With two thirds of the vote counted, the Labour Party was forecast to take around 64 seats in the 120-member parliament.
"This is a historic shift," said political commentator Bryce Edwards of Victoria University in Wellington, describing the vote as one of the biggest swings in New Zealand's electoral history in 80 years.
Labour was on track to win 64 of the 120 seats in the country's unicameral parliament, the highest by any party since New Zealand adopted a proportional voting system in 1996.
If Labour wins more than half the seats, Ardern could form the first single-party government under the current system.
Labour had 49.0 per cent of the votes, far ahead of National at 27 per cent, the Electoral Commission said, with 77 per cent of ballots counted in an election that was largely a referendum on Ardern's aggressive handling of Covid-19.
"People were very grateful and very happy with how we've handled Covid, they like the shape of the plan that we've got going forward from here for the economy," said Finance Minister Grant Robertson, a top Labour MP.
Geoffrey Miller, analyst at political website Democracy Project, said the victory was "very much a personal triumph for Jacinda Ardern's 'superstar' popularity and brand."
A Labour-Green coalition would be the first fully left-leaning government since the 1970s, a scenario that National's Collins warned would mean more taxes and an environment hostile to business.
Ardern has pledged to raise taxes on top earners, while Collins promised short-term tax cuts, but they have otherwise shown few major differences on policy.
'Be Strong, Be Kind'
She burnished that reputation this year with a "go hard, go early" approach to the new coronavirus, which has eliminated locally spread Covid-19 in the nation.
The election was delayed by a month after new Covid-19 infections in Auckland, that led to a second lockdown in the country's largest city.
While known internationally for promoting progressive causes such as woman's rights and social justice, at home Ardern faced criticism that her government failed on a promise to be transformational.
Life is back to normal in New Zealand, but its borders are still shut, its tourism sector is bleeding and economists predict a lasting recession after the harsh lockdowns.
The economy shrank at an 12.2 per cent annual clip in the second quarter, its steepest drop since the Great Depression. Debt is forecast to rise to 56 per cent of gross domestic product from less than 20 per cent before the pandemic.
New Zealanders also voted on Saturday in referendums to legalise euthanasia and recreational marijuana, with results to be announced on Oct. 30. The latter vote could make New Zealand only the third country in the world to allow the adult use and sale of cannabis nationwide, after Uruguay and Canada.
Sheikh Mohamed said solving the challenges facing the planet requires a shared vision
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The draw for the $1,000,000 grand prize is set to take place live on December 2