Kevin Rudd has conceded defeat and says he will step down as leader of the Labor party.
Addressing a cheering room of supporters in Brisbane and flanked by wife Therese Rein and sons Nicholas and Marcus, Mr Rudd said he took responsibility for the defeat.
But striking an upbeat tone, he also claimed to have preserved the Labor party as a viable force for the future and said he was proud the party may have held every seat in Queensland and that every cabinet member may have retained their seat.
The Labor party dumped Julia Gillard as leader in late June in favour of Mr Rudd, and while opinion polls briefly showed a bounce for Labor, the party's popularity again dwindled as the election campaign unfolded.
Mr Rudd vowed that the Labor party will rise from defeat refreshed and with new ideas for the future, saying the Labor movement was one of hard heads and soft hearts that was strong and vital.
He called on the party to unite behind whoever will be its new leader.
He thanked voters in his seat of Griffth and expressed pleasure at beating his Liberal challenger and former president of the Australian Medican Association Bill Glasson, who was tipped by some to win the seat.