Christian democrat leader Marianne Thyssen conceded defeat at 7PM. She noted that her party had notched up four election victories in a row, but had now not been able to maintain its position.
She pointed to the situation across Europe where parties in government had failed to impress their electorate.
Ms Thyssen said that it was not a foregone conclusion that taking responsibility led to electoral success.
She noted that the Christian democrats had been the only party to defend the government's record.
The CD&V leader congratulated Bart De Wever's Flemish nationalists on their victory and said that Mr De Wever should now take the initiative.
The Christian democrats have suffered as a result of the strong showing of the Flemish nationalists of N-VA, their former alliance partner.
While the N-VA decided to quit the Federal Government in protest against the lack of progress on state reforms, the CD&V remained in office tackling the financial and economic crises.
The Christian democrats, historically a party of government, did best in West Flanders, where PM Yves Leterme heads the list fro the Chamber of Representatives.