Meloni's Brothers of Italy party, which has neo-fascist roots, is set to win around 26% of the vote in Sunday's election, while her wider coalition secured a clear majority in parliament.
Along with former premier Silvio Berlusconi and Matteo Salvini's far-right League, she will begin forming the most right-wing government since World War II, a process likely to take weeks.
Meloni's success represents a seismic change in Italy — a founding member of the European Union and the eurozone's third-largest economy. The victory comes weeks after the far-right performed strongly in Sweden's elections.
Meloni used her first public statement to emphasize unity, saying she would govern "for all Italians."
But the 45-year-old, whose party has never held office, has huge challenges ahead, from soaring inflation to a looming energy crisis and the war in Ukraine.
Congratulations flooded in from Meloni's European nationalist allies, from Polish Prime Minister Mateusz Morawiecki to Spain's far-right party Vox.
"Meloni has shown the way for a proud, free Europe of sovereign nations," Vox leader Santiago Abascal tweeted.
But Spanish Foreign Minister Jose Manuel Albares warned that "populist movements always grow, but it always ends in the same way — in catastrophe."
A spokesman for the European Commission said it hoped for "constructive cooperation" with the new government, a line echoed by the Kremlin.
"We are eager to work with Italy's government on our shared goals: supporting a free and independent Ukraine, respecting human rights and building a sustainable economic future," US Secretary of State Antony Blinken said.
"Italy is a very Europe-friendly country with very Europe-friendly citizens and we assume that won't change," added a spokesman for German Chancellor Olaf Scholz.
Meloni and Salvini are strongly Eurosceptic, although they no longer want Italy to leave the eurozone.
The Brothers of Italy head says Rome must assert its interests more, and has policies that look set to challenge Brussels on everything from public spending rules to mass migration.
Her coalition also wants to renegotiate Italy's part of the EU's post-pandemic recovery fund, arguing the almost 200 billion euros ($193 billion) it expects to receive should take into account the energy crisis.
Meloni campaigned on a platform of "God, country and family," sparking fears of a regression on rights in the Catholic-majority country.
She had been leading opinion polls since snap elections were called in July after Draghi's government collapsed.
Hers was the only party not to join Draghi's national unity coalition in February 2021, making her effectively the sole opposition leader.
Salvini highlighted this as he lamented his League party's poor performance at around 9% but said he would play his part in the new government.
Turnout fell to a historic low of around 64%, and some Italians viewed the results as yet another chapter in the country's instability.
Meloni has attempted to distance herself from her party's neo-fascist past — and her own, after praising dictator Benito Mussolini as a teenager — and presented herself as a straight-talking but unthreatening leader.
"Her challenge will be to turn this electoral success into a governing leadership... that can last," Lorenzo De Sio, head of Italian electoral studies centre CISE, told AFP.
Italian politics is notoriously unstable, with nearly 70 governments since 1946, and Meloni, Salvini and Berlusconi do not always agree.
The coalition partners have a joint program for government, including tax cuts and promises to cut mass migration.