The election was seen as a key benchmark in the country’s bid to launch membership negotiations with the European Union.
The Central Election Commission said that with all the ballots counted, the governing Socialists of Prime Minister Edi Rama had won 74 places in the 140-seat parliament.
Thousands of Socialist supporters gathered at Tirana’s recently renovated Skanderbeg Square to celebrate the victory.
“These results will bring us closer to the accession talks with the European Union, which we expect to be commenced by the end of this year,” Rama told the crowd.
The previous government was a coalition of the Socialists and the Socialist Movement for Integration, or LSI, often creating problems for Rama.
The opposition Democratic party of Lulzim Basha won 29 percent, or 43 seats in Sunday’s election. The LSI placed third with 19 seats.
Turnout in Sunday’s election fell to 46.7 percent, 7 points lower than in 2013.
International observers who monitored the polling hailed the generally calm campaign and voting, but also noted that ongoing political fights are having a negative effect on the formerly communist country’s democracy.
The U.S. embassy in Tirana said that the incidents “were not so widespread as to change the overall outcome of the elections.”
Federica Mogherini, EU’s foreign policy chief, and Enlargement Commissioner Johannes Hahn urged the new Cabinet to continue the reform process.
“The continuation of the justice reform and the fight against drug trafficking and cultivation will be of particular importance in this respect,” their statement said.
The governing Socialists agreed in May to give the opposition Democrats a greater role in overseeing election transparency.
The two parties also pledged to work together toward eventually joining the European Union.
Rama extended the hand of cooperation to the opposition on Tuesday and thanked his opponent Basha for agreeing to “put Albania first” with the May deal that allowed the election to proceed.
“It is time to put Albania before our parties, the country’s interest ahead of our political ones,” he said.
Rama had pledged that his new cabinet would work hard on a reform agenda to root out corruption and fight drug trafficking, achieve faster economic growth, improve pay and lower unemployment.
The nation of 2.9 million, a NATO member since 2009, received EU candidate status in 2014.