Her main opponent, Eric Chu of the Kuomintang party, conceded just after 7 pm. "I congratulate Chairman Tsai Ing-wen of the DPP on her victory," he said. "This is the choice of Taiwan's people."
With two-thirds of the polling stations reporting results, Tsai had 57 per cent of the vote to Chu's 30 per cent, Taiwan's Central Election Commission reported.
The campaign largely pivoted on economic issues, as growth in Taiwan has slowed dramatically over the past year. Wages have stagnated and housing prices in major cities like Taipei have remained out of the reach of many people.
Voters also soured on the departing president, Ma Ying-jeou, and his policy of pursuing a closer relationship with China, Taiwan's giant neighbour, which considers the self-governed island to be a part of its territory with which it must eventually be united.
On the night before the election, speaking to a huge crowd of supporters on a boulevard across from Taiwan's Presidential Office Building, Tsai recalled protests that have filled the capital's streets in recent years. Those included demonstrations over the death of a young soldier and the Sunflower Movement, a student-led protest against the pursuit of a trade bill with China by the governing party, the Kuomintang.
Tsai, who has consistently held a wide lead in opinion polls, will be only the second president not to belong to the Kuomintang, the party that ruled Taiwan as an authoritarian state until democratic reforms began in the late 1980s.
DPP traditionally supports Taiwan's formal independence. The tenure of the previous DPP president, Chen Shui-bian, who led Taiwan from 2000 to 2008, saw increased tension with China and concern that it would use military force against the island.
Tsai, who during a failed 2012 bid for president was criticised by the Kuomintang as being unable to manage the relationship with China, pledged during this campaign to maintain the cross-strait status quo.
The head of China's Taiwan Affairs Office, Zhang Zhijun, said last month that "complicated changes are arising in the Taiwan situation" and warned "compatriots on both sides to be on alert for and oppose Taiwan independence."
Analysts expect Tsai to take a more cautious approach to China than did President Ma, who pushed through more than 20 agreements between the two sides.
With Taiwan's economy contracting over the last quarter, Tsai's first priority will be to revive growth. She has proposed developing regional industrial bases, including high-tech in Taiwan's north and advanced manufacturing in the center of the island. She also emphasiaes expanding Taiwan's trade ties globally.
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