Incumbent Finnish Prime Minister Sanna Marin has conceded defeat after the opposition National Coalition Party won the parliamentary elections.

According to the preliminary results reported by Finnish national broadcaster Yle, the National Coalition Party won 48 seats in parliament, an increase of 10 from four years ago, followed by the Finns Party with 46 seats, an increase of seven.

Marin's Social Democratic Party won 43 seats, an increase of three, reports Xinhua news agency.

Voter turnout on Sunday was 71.9 per cent, slightly less than in 2019.

Shortly after National Coalition Party leader Petteri Orpo claimed victory, Marin conceded the election.

"Congratulations to the winner of the elections, congratulations to the National Coalition Party, congratulations to the Finns Party. Democracy has spoken," the BBC quoted the Prime Minister as saying to her supporters.

Commenting on the result, Orpo said this was an important win for the party, and he was confident that the formation of the new government would begin under his leadership.

Orpo did not reveal the possible composition of the upcoming ruling coalition, but said that the new government's priority would be to fix the country's economy.

In a major change, medium-sized parties suffered losses: the Center Party lost eight seats, the Greens lost seven, and the Left Alliance party lost five.

The election campaigns focused mainly on economic and welfare issues.

The National Coalition Party, in particular, underlined the need to balance the state budget and reduce the need for new debt.

Commentators noted that the formation talks of a coalition government could take some time as the combined seats of the two right-wing parties, the National Coalition Party and the Finns Party, still fell short of a parliamentary majority and would require support from other smaller parties.

The election result will be officially confirmed on Wednesday, and the new Parliament will commence work next week.

This was however, a bitter defeat for Marin, but she continues to enjoy high poll ratings and has been widely praised for steering Finland towards imminent entry into NATO and navigating her country through the Covid-19 pandemic.

Now 37, Sanna Marin became the world's youngest leader when she burst on to the political scene in 2019.

She headed a coalition of five parties, all led by women.