Preliminary results of the official election show Merz's Christian Democrats (CDU) and their Bavarian sister party the Christian Social Union took 28.5 per cent of the vote in first place.
Alternative for Germany (AfD) were heavily backed by international voices - including Elon Musk and US VP JD Vance - and managed to take second place after making their biggest gains since World War II.
Current Chancellor Olaf Scholz and his Social Democratic Party (SPD) collapsed to a dismal third place with the outspoken leader set to be ousted from his role shortly.
During his victory speech on Sunday night, Merz said: "We have nearly eight weeks until Easter now, and I think that should be enough time - the maximum time - to form a government in Germany.".
The AfD won a record 20.8 per cent in second - securing its best result in a federal election since it formed in 2013.
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