Bill Shorten’s ambition to become Australia’s 31st prime minister has been dashed after Labor’s shock election loss on Saturday.

The Maribyrnong MP will step down as Labor leader after six years following the party’s failure to convert strong polling figures into enough seats to take government for the first time since 2013.

Mr Shorten has promised to stay on as the member for Maribyrnong and indicated a desire to remain on the Opposition front bench.

An emotional Mr Shorten conceded the election loss on Saturday night.

Speaking to a disappointed party faithful, with wife Chloe by his side, he said the election campaign had been tough and “toxic” at times, but he respected the wishes of the Australian people.

“I wish we could have won for the true believers, for our brothers and sisters in the mighty trade union movement,” he said.

“While I intend to continue to serve as the member for Maribyrnong, I will not be a candidate in the next Labor leadership ballot.

“Labor’s next victory will belong to our next leader and I’m confident that victory will come at the next election.”

Prime Minister Scott Morrison claimed his victory near the stroke of midnight, praising “the quiet Australians” for their support.

“I have always believed in miracles,” he said.

With counting still taking place in a handful of closely-run contests, Mr Morrison’s Coalition is tracking towards holding a clear majority of at least 76 of the 151 seats.

Jockeying for the role of Labor party leader is intensifying, with Anthony Albanese favourite to take the job ahead of other hopefuls including Chris Bowen and Jim Chalmers.

Deputy leader Tany Plibersek, nominated by Mr Shorten as his preferred leader, has declined to contest the role.

Locally, Labor made the most of its safe buffer to complete their predicted clean sweep in three inner-west Melbourne seats.

With 73 per cent of the vote counted by Tuesday, Mr Shorten had secured 48 per cent of the primary vote in Maribyrnong and 61 per cent of the two candidate preferred vote.

Gellibrand MP Tim Watts was returned for a third term while former Victorian upper house Labor MP Daniel Mulino will become the first Member of the newly created seat of Fraser.

Former Maribyrnong mayor Janet Rice has been returned to the Senate for The Greens.