Denmark's Social Democratic leader Helle Thorning-Schmidt, 44, is set to become the country's first female prime minister, after her center-left bloc narrowly won general elections, ending a decade of center-right rule.
She began talks Friday to form a new government.
Prime Minister Lars Loekke Rasmussen conceded defeat late Thursday.
Thorning-Schmidt and Loekke Rasmussen share similar views on the economy, foreign policy, welfare and immigration, but differ in their outlook on taxes.
Thorning-Schmidt wants to avoid some of the country's planned austerity measures by raising taxes on wealthy Danes and banks. Loekke Rasmussen had ruled out any tax increases.
The Thorning-Schmidt is the daughter-in law of British Labor politician Neil Kinnock.
Some information for this report was provided by AP, AFP and Reuters.