A socialist doctor and former political prisoner has been elected as Chile's first female president.

With 97.5 per cent of about eight million votes counted by early Sunday evening, Michelle Bachelet of the centre-left coalition Concertacion had captured 53.5 per cent of the vote.

Her conservative opponent, Sebastian Pinera, held 46 per cent of the ballots and conceded defeat.

Michelle Bachelet shows her inked thumb after voting in Santiago, Chile on Sunday. (AP Photo)

"I want to congratulate Michelle Bachelet for her triumph," Pinera, a billionaire businessman, said in a televised concession speech.

Bachelet, 54, is a pediatrician who was held as a political prisoner during the dictatorship of Gen. Augusto Pinochet.

She won 46 per cent of the votes during a presidential election against three other candidates in December, but needed to win more than half the votes to be declared president without the runoff poll.

Bachelet was defence minister for three years under the centre-left coalition that has governed Chile since Pinochet's military regime was ousted in 1990.

Female vote thought to be crucial in runoff

The female vote was thought to be key in the runoff election.

Voting is mandatory in Chile and a majority of women surveyed before the runoff said they would back Bachelet, a single mother with three children.

Although Bachelet has liberal social views, she won the trust of business leaders by promising to continue the economic policies of the popular outgoing president, Ricardo Lagos.

In fact, Bachelet and Pinera shared common campaign themes, including support for free-market economics, more trade agreements and careful government spending.

Family history lured voters to Bachelet

Bachelet won voter support in part because of her family history.

Her father, Alberto, was an air force general who was charged with treason after the 1973 coup led by Pinochet. He was jailed, tortured and died in prison.

Bachelet, who was only 22 at the time, was briefly jailed along with her mother.

She then left Chile and spent five years in exile in Austria and East Germany, where she studied medicine.

She was an unknown when she entered politics, but benefited when Lagos introduced a policy requiring five cabinet ministers to be women.