Liberal Leader Michael Ignatieff lost his job as Official Opposition leader and as an MP in Monday's federal election, making his political future uncertain after his party suffered a historic defeat under his leadership.

The Liberals finished in third place for the first time in Canadian history, while the Conservatives finally secured a majority government and the NDP formed the Official Opposition.

The Liberals entered the election with 77 seats and are poised to finish it with just 34.

Ignatieff, who lost his own seat by more than 2,900 votes, spoke to supporters at a downtown Toronto hotel around 11:15 p.m. ET and offered his congratulations to Conservative Leader Stephen Harper, and to Layton, referring to him as the new opposition leader.

"Democracy teaches hard lessons and we have to learn them all. We have to be big enough, open-hearted enough, courageous enough, to read the lessons that the Canadian people have taught our party tonight," said Ignatieff.

Ignatieff called his party's defeat "historic" and said he takes responsibility for it. He did not offer his resignation, saying he wants to stay on as leader as long as his party will have him at the helm.

He encouraged his fellow Liberals to remember what their party stands for and he spoke of the legacy of its past leaders.

"I'm the humble heir of that tradition and I didn't come into politics to see that tradition die," said Ignatieff, who was first elected in 2006. "I came into this political life to see it strengthen, renew, reform and grow."

He said he will need the help of every Liberal to help the party rebuild following Monday's shocking results.

He tried to lighten the sombreness of his remarks by encouraging supporters to remember "the happiness, the joy of politics."

The Liberals suffered a number of their losses in Ontario, largely giving up ground to the Conservatives in the vote-rich province. But Liberal MPs were defeated from coast to coast by both NDP and Tory candidates.

Ignatieff said he spent the evening making phone calls to those defeated MPs and they spoke about how proud they were of what they contributed to the House of Commons.

Well-known faces among defeated

Among the Liberal MPs who will not be returning to Ottawa are Mark Holland, Gerard Kennedy, Maria Minna, Ruby Dhalla, Paul Szabo, Siobhan Coady, Todd Russell, Yasmin Ratansi, Ken Dryden, Ujjal Dosanjh and Dan McTeague.

"There should be no tears, there should be pride for what we fought for," Ignatieff told the crowd.

He thanked all of the Liberal candidates and campaign workers, and his own personal team.

"I'm so proud of you," Ignatieff said.

Liberal front-bencher Bob Rae was asked Tuesday morning about Ignatieff's future and the possibility that he might replace him as leader.

"Well, there’s lots of time to figure that out," he said. Rae praised his old friend for a "very fine and very open" concession speech.

"I think all Liberals — and all Canadians — who watched him realized this was a man of substance who hit a brick wall. And sometimes that happens, and there’s no explaining it. I think he’s handled himself with great dignity and determination, and I think he will continue to do that."

Ignatieff had a lot to prove — and disprove — in this campaign, having been the target of attack ads by the Conservatives virtually since he took over the party in late 2008.

He was the only rookie leader in the race, fighting his first federal election while his opponents have years of experience.

Under his leadership, the Liberals slipped to third place in the polls in the final weeks of the campaign, allowing the NDP to pass them and come within striking distance of the Conservatives.

The campaign did not start out as badly for the Liberals as it ended.

The Liberals had considerable momentum in the early days. Ignatieff successfully squeezed Layton out of the picture when he was issuing challenges to Harper for one-on-one debates.

But when it came to the English-language debate on April 12, Ignatieff underperformed, and Layton landed a particularly sharp attack on the Liberal leader, calling him out on his attendance record in the House of Commons.

Ignatieff could have easily retorted that he had spent much of 2010 travelling the country in an attempt to connect with Canadians and that he has been an open and transparent leader, in contrast to Harper. But Ignatieff was caught off guard by the charge and failed to defend himself.

The Liberal leader, however, ran a relatively smooth campaign overall. There were no major gaffes on Ignatieff's part and he took every opportunity he could to speak directly to Canadians push his party's platform.

The Liberals were the first to release their platform, though many of its policies were already known.

They plan to pay for their promises largely by raising corporate tax rates and scrapping a plan to buy 65 fighter jets. The main promises included helping Canadians save for post-secondary education, offering financial support for caregivers, helping hard-pressed seniors, and a green renovation tax credit.

The Liberals were also responsible for making the future of health-care an issue in the campaign when they pledged to maintain the annual six per cent funding increase to the provinces after the current agreement expires in 2014.

The NDP and Conservatives quickly promised the same thing. But the Liberals couldn't maintain that early momentum, and they started to slip in the polls.

As the NDP surged, particularly in Quebec, Ignatieff then had to change his campaign strategy and fight on another front, as well as taking on the Conservatives.