Labor has promised to immediately begin work on the second stage of light rail, treating its election win as an effective referendum on the project.
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The re-election of a Labor-Greens coalition government means work on light rail will forge ahead, and a contract for stage two of the project from Civic to Woden is expected to be signed within the next term of government.
Chief Minister Andrew Barr said Saturday's result was a clear indication that the city wanted light rail.
"Tonight we can confidently say that Canberra has voted for the light rail," Mr Barr said.
"We have decided as a city that we don't want to become gridlocked like Sydney or Melbourne.
"I want to thank the people of Canberra for backing our positive plan for this city."
Labor's success was perhaps most notable in the area of Gungahlin, which will be the first area to benefit from stage one of light rail.
Labor was predicted on Saturday night to win 44 per cent of the vote in Yerrabi and achieve a 2.8 per cent swing towards it.
The Liberals had banked on anti-light rail sentiment to fuel a protest vote against Labor. Their campaign to stop the tram and redirect money to health, roads and buses was, to some degree, nullified by Labor's announcements of a massive hospital upgrade and infrastructure package.
"Canberrans have shown that they overwhelmingly expect the government to be able to do more than one thing at once," Mr Barr said.
Labor will now need to turn its mind to the second stage of light rail, which is expected to cost roughly the same as the first stage – $939 million over 20 years in today's dollars.
Its plan to build a north-south spine from Gungahlin to Woden is complicated by the need to cross Lake Burley Griffin.
The government plans to use Commonwealth Avenue bridge to get trams across the lake, but has done only preliminary design work.
It has been suggested in the past that the bridge will need to be strengthened to accommodate light rail.
Mr Barr said Labor would immediately begin work on the second stage of light rail once it forms government with the Greens.
"Our city will truly have a north-south public transport spine that will guide the future planning and development of this great world national capital," he said.
