
IMAGE SOURCE, REUTERS Image caption, Glenn Youngkin has focused his campaign on education issues
He is 2.7 points ahead of Democrat Terry McAuliffe, with more than 95% of votes counted.
Mr McAuliffe, who served as governor from 2014-18, saw his opinion poll lead vanish in recent weeks.
The ballot has been widely seen as a referendum on Joe Biden’s presidency, and defeat will unnerve the Democrats.
Mr Biden won by 10 points in Virginia just a year ago.
In a speech to cheering fans, Mr Youngkin called his victory a “defining moment”.
Mr McAuliffe is yet to concede and sounded confident while addressing supporters after the vote.
In more potential good news for Republicans in Virginia, their candidate, Winsome Sears, is tipped to become the first black female lieutenant governor of the state, which was the former seat of the pro-slavery Confederacy during the American Civil War.
In other elections across the US on Tuesday:
- New Jersey’s Democratic Governor Phil Murphy is in an unexpectedly tight race as votes are counted in his re-election bid against Republican challenger Jack Ciattarelli
- Amid surging crime, Minneapolis voters rejected a proposal to replace the city’s police department with a new Department of Public Safety, more than a year after the murder of George Floyd by an officer
- As expected, former police officer Eric Adams has won New York City’s mayoral election to replace Democratic Mayor Bill de Blasio
- In other races, voters in Boston elected their first woman of colour as mayor, Michelle Wu, an Asian-American, and Pittsburgh picked its first black mayor, Ed Gainey
Mr Youngkin will be the first Republican elected to statewide office in Virginia since 2009.
Mr McAuliffe campaigned on other cultural issues, such as abortion rights and voting reform.
But the Democrat’s critics hammered him for saying during a debate: “I don’t think parents should be telling schools what they should teach.”

According to exit polls by the BBC’s US partner, CBS, education and the school curriculum were top issues for slightly more than half of all voters.
At a news conference earlier on Tuesday, Mr Biden predicted his party would win the first major election since he took office 10 months ago, but he acknowledged “the off-year is always unpredictable”.
Mr Biden’s popularity has been sliding amid rising inflation, a slow economic recovery, a deadlocked legislative agenda and the aftermath of a disorderly US withdrawal from Afghanistan.
The Democratic president’s approval rating has fallen to 43%, according to an opinion poll average by RealClearPolitics.
The McAuliffe campaign tried to liken the challenger to former President Donald Trump, who remains unpopular in Virginia.
But Mr Youngkin, a mild-mannered private equity tycoon, sought to appeal to moderates by keeping Mr Trump at arm’s length, while tapping into the former president’s supporters in the state.
His balancing act may offer a template for Republicans seeking to win back suburban moderate voters who were turned off by Mr Trump’s firebrand style of politics.
The race could shape party messaging and battle-plans for next year’s mid-term elections, when the Democrats will defend their wafer-thin majorities in Congress, and the 2024 White House election.
Mr Trump was quick to project victory for Mr Youngkin.
He said in a statement: “I would like to thank my Base for coming out in force and voting for Glenn Youngkin.”
He added: “The MAGA movement is bigger and stronger than ever before.”
The winner will succeed outgoing Democratic Governor Ralph Northam.

The Trump playbook without Trump
By Tara McKelvey, BBC News, Fairfax
The restaurant was crowded, with people angling for the best place to watch election returns on big screens, with American flags everywhere.
They had gathered for a watch party, hoping to see their candidate, Glenn Youngkin, a Republican, win the governor’s race.
Over the past several months, he has charted a course for conservatives – he talks frequently about race relations in the US, and has denounced the teaching of critical race theory.
He ran on a law-and-order platform, and opposed mask mandates, and his messaging echoed the kind that Mr Trump uses. But Mr Youngkin kept his distance from the former president.
In this way, Mr Youngkin has appealed to voters who like Mr Trump’s positions, but are uneasy about the man himself.
Mr Youngkin’s approach has helped propel him to a close race, and is likely to guide other conservatives in their campaigns for the congressional midterms.