Asuncion: Roman Catholic bishop Fernando Lugo won Paraguay's presidential election on Sunday to end more than 60 years of one-party rule.

Lugo got 41 per cent of votes to beat ruling party candidate Blanca Ovelar by 10 percentage points, according to official results from92 per cent of polling stations.

Ovelar, the first woman to run for president in Paraguay, conceded defeat on Sunday night as tens of thousands of Lugo's supporters packed the central square in Asuncion.

"You've decided that Paraguay will be free and independent," the 56-year-old Lugo shouted to the jubilant crowd. "We've made history with these elections!"

Lugo left his post as bishop three years ago, saying he felt powerless to help Paraguay's poor. He takes office on August 15.