Exit polls suggest that coalition led by the Democratic Party of Kosovo is leading with 40 percent of the votes.
A coalition led by the ruling centre-right Democratic Party of Kosovo (PDK) is set to win Kosovo's snap parliamentary election on Sunday, according to exit polls.
The television station Kosova Klan published exit polls giving the PDK-led coalition 40 percent, the Vetevendosje (VV) party 30 percent, and a coalition led by the Democratic League of Kosovo (LDK) 27 percent.
About 1.9 million Kosovars, nearly half a million of whom live abroad, were registered to vote in the third election since Kosovo declared independence in 2008.
The state election commission put the turnout at 41.5 percent, compared to 43 percent at the last election in 2014.
"Voters showed they trust our coalition," Ramush Haradinaj, the PDK-led coalition's candidate for prime minister, told a news conference. Haradinaj is a member of the small Alliance for the Future of Kosovo (AAK).
"With this vote now, we are obliged to form the government, and we will do that."
The new government will have to tackle unemployment running at 30 percent and improve relations with Kosovo's neighbours, especially Serbia, a precondition for both countries to move forward in the European Union accession process.
The West sees the integration of the Western Balkan countries into the European Union as a way to stabilise a region still recovering from wars in the 1990s.
Europe's youngest population
Early elections were called in May when the government of Prime Minister Isa Mustafa lost a no-confidence vote, accused by the opposition of failing to meet pledges to improve the lives of the youngest population in Europe.
"Those who were in power should not come again, they are incriminated too much. They want to stay because they have created a lot of privileges for themselves," said Hasan Visoka, 62, after voting in a school in the capital, Pristina.
"Nothing will change. It doesn't matter who comes to power, we'll continue to be poor, without a future," Arta Kelmendi, 28, said after voting.
But if Haradinaj does become prime minister, it will probably complicate relations with Serbia, which has issued an international warrant for his arrest on war crimes charges.
The new government will also have to try to strike a border demarcation deal with Montenegro, which is the last condition for the European Union to grant visa-free travel for Kosovars.
Kosovo's neighbours Albania, Macedonia, Montenegro and Serbia have all already secured visa-free travel to EU member states.
Kosovo's economy has been growing steadily and is forecast to expand by about 4 percent in 2017, but the growth is mainly down to remittances from a million or so Kosovars living abroad.
Kosovo declared independence in 2008, nine years after NATO bombing drove out Serbian forces accused of killing and expelling Kosovo Albanian civilians as Serbia tried to put down an ethnic Albanian insurgency.
Serbia still refuses to recognise Kosovo's independence.