Vazquez, a 74-year-old cancer doctor who previously served as president from 2005 to 2010, won between 53 and 53.9 percent of the vote, and will succeed his Broad Front (FA) party colleague Jose Mujica, according to three different exit polls yesterday.
His center-right opponent, 41-year-old lawmaker Luis Lacalle Pou, took between 40.6 and 42 percent of the vote, found the pollsters, Factum, Cifra and Equipos Mori.
Lacalle Pou, a former president's son and passionate surfer who ran on the National Party ticket, conceded defeat after the exit polls were released.
The small South American country will now watch to see how Vazquez, a straight-laced politician with a formal style, handles the take-over from Mujica, a former guerrilla fighter and consummate rabble-rouser famous for living in a humble farmhouse and donating most of his salary to charity.
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Vazquez, who has at times clashed with Mujica within the FA, cuts a much more sober figure than his successor, who still drives around in his beat-up Volkswagen Beetle and is known as "the world's poorest president."
Vazquez has said his policy priorities will be education, infrastructure and public safety.
Mujica's landmark initiative, legalizing marijuana, may face an uncertain future in Vazquez's hands.
Under the law, the first of its kind in the world, marijuana users were supposed to be able to choose a supply source -- pharmacies, cannabis clubs or home-grown plants -- and buy or grow the drug in a regulated, fully legal market.