Joko Widodo, who hopes not just to dominate Indonesian politics but to wrest it from the hands of Indonesia’s old, corrupt elite, was late last night pronounced the winner of the country’s presidential election with a convincing 53.15 per cent of the vote.

President Joko will not begin his five-year term until October 20, but last night he suggested that his success, which was driven by the work of thousands of volunteers, not party apparatchiks, signalled a flowering of hope in Indonesian politics.

“An independent soul and sense of political responsibility blossoms in the soul of the new generation. Their enthusiasm — which had sunk into torpor — has returned,” he said.

The election, in which he claimed support “from artists to rickshaw drivers,” had been a “cultural event, not merely a political event”, adding: “Politics is full of fun; politics has some wisdom; politics is freedom”.

But Mr Prabowo, a former army strongman and now three-time failed presidential candidate, tried to pre-empt the announcement by “withdrawing” from the entire election process, saying it was the result of “massive cheating that is structured and systematic”.

“[We] will exercise our constitutional rights by rejecting the presidential election because of its legal flaws and by retracting ourselves from the ongoing process,” Mr Prabowo said.

However, his team confirmed he would not challenge the result in the Constitutional Court, which means Mr Joko’s victory now appears final.

Mr Prabowo, who has denied the reality of his defeat since “quick count” polls foreshadowed it on the July 9 election day, said on Tuesday he blamed the Electoral Commission and unnamed “foreign parties with the specific purpose” of making the elections “unfair and dishonest”.

“We … were ready to win or to lose, but only in a respectable democratic process,” Mr Prabowo said.

His running mate Hatta Rajasa was not present at this announcement.

Mr Prabowo did not call his supporters out to protest, saying instead: “We ask everyone who voted for us to be calm and be assured that we are not letting our democratic rights be robbed”.

Jakarta’s streets were quieter than usual last night as a heavy police presence stood by. 

Mr Prabowo’s political confidante, Fadli Zon, said the campaign team would let their supporters know what the next step was, “but for sure it will not be anything illegal”.

There was speculation late on Tuesday that Mr Prabowo’s withdrawal from the process violated the presidential election law, which says anyone who pulls out after the voting will be jailed for between three and six years, and fined 50 billion and 100 billion rupiah ($5 million to $10 million).

It is unclear what, if anything, the former general will do next, though he has announced a press conference on Wednesday morning. 

Mr Prabowo’s legal representative has said, however, his withdrawal meant he no longer had standing as a candidate to launch a Constitutional Court challenge, and therefore he would not take that route.

His extraordinary response to the defeat comes despite the advice of the outgoing president, Dr Yudhoyono, that “to concede is noble”.

Mr Joko grinned broadly as the chairman of the Electoral Commission Husni Kamil Manik banged his gavel at about 9.10pm local time (12.10am AEST) to finalise the count in Indonesia’s third direct presidential election. 

The final count of almost 135 million votes, which were cast on July 9, showed the new president elect and his running mate Jusuf Kalla had won by a comfortable margin of 6.3 per cent, or 8.4 million votes.

Apart from Mr Prabowo’s refusal to concede, the election has run almost entirely without incident, even though it was by far the tightest and hardest-fought in the history of Indonesia’s young democracy.

Mr Joko, known universally as Jokowi, thanked Mr Prabowo after the declaration of the poll, expressing his “high appreciation” for his opponent becoming “our best friends in the political competition”.

Then he spoke of reuniting the country after the hard-fought campaign and the “souring” of relations between families, neighbours and friends.

“With humility, we, Joko Widodo and Jusuf Kalla, ask all of you, our fellow countrymen to go back to your historical fate as a united nation,” he said.

“Farmers should now go back to the rice fields, sailors should go back to the sea, our children return to school, traders to the market, labourers to their factories and employees to their offices.”

Mr Joko, who has enjoyed a dazzling ascendence from his first political role as mayor of regional city Solo in 2005, then to Jakarta governor in 2012, represents a significant break from Indonesia’s political past. From a poor upbringing, he came neither from an elite family nor through the once-mighty Indonesian military, instead making his start as a furniture manufacturer and later, a provincial mayor. 

He comes to power as Indonesia’s economic growth rate and currency are both weakening, its budget and current account deficits growing and the cost of its fuel subsidy increasing.

His deputy, Mr Kalla, has said that reducing the fuel subsidy — which keeps petrol prices around 58c per litre but costs one quarter of the national budget — is the Jokowi government’s first priority.

Longer term, the new president faces huge challenges in reducing corruption and needless red tape, professionalising the bureaucracy and improving the parlous state of health and education across the massively diverse and still-poor archipelago.

The reform task largely eluded the outgoing president, Susilo Bambang Yudhoyono, whose final five-year presidential term increasingly sank into torpor and indecision. He was constitutionally barred from running again.

In international relations, Mr Joko must seek to repair and then consolidate the troubled relationship with Australia and try, as the biggest power in ASEAN, to resolve issues between south and north Asia, particularly surrounding China’s territorial ambitions.

His first overseas trip is likely to be to the G20 meeting in Brisbane in November, though his attendance has not been confirmed.

Prime Minister Tony Abbott congratulated Mr Joko on his victory and said in a statement that the Australian government looked forward to working closely with Indonesia's new leader.

''The election is a significant milestone. Indonesia is the world’s third-largest democracy. Indonesia is to be congratulated on its remarkable transition to democracy and on the conduct of the election.'' the statement, released on Wednesday morning, said.

''The relationship with Indonesia is extraordinarily important to us. We share a long history of cooperation on a wide range of common interests and challenges. We enjoy a highly productive and broad-based partnership that encompasses business, education, defence, security and people-to-people links.

''All Australians should acknowledge outgoing President Susilo Bambang Yudhoyono’s vast contribution to his country and to our world during his two terms and ten years as president. President Yudhoyono has provided Indonesia with wise leadership and political stability, consolidating democratisation and economic growth. He remains a great friend of Australia.''