The two parties widely blamed for the collapse of Iceland’s economy five years ago will form the next government.
Polling 26.7 percent in Saturday’s election, the opposition Independence Party will get 19 parliamentary seats. Leader Bjarni Benediktsson is expected to become prime minister.
Joining the centre-right coalition and almost doubling their share of the vote is the Progressive Party, led by Sigmundur David Gunnlaugsson.
Progressive polled 24.4 percent of the vote – meaning together, both parties will hold 38 out of 63 parliamentary seats.
Both parties are Eurosceptic which could affect any discussion on Iceland joining the EU.
Independence governed Iceland for decades before the economic meltdown in 2008 which saw three national banks collapse.
Promising debt relief and tax cuts, the centre-right coalition will replace the Social Democrats, who have been blamed for four years of harsh austerity.
The Social Democrats will only have nine seats, after polling 12.9 percent.