Labor’s 11-year reign in Victoria is over after Premier John Brumby conceded defeat, two days after the party was battered at the polls.

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A stoic Mr Brumby fronted a large press pack and a room full of family, staff and cabinet colleagues late on Monday to declare that Labor’s hopes of a historic fourth term were over.

In a speech interrupted only once as he reined in his emotions, Mr Brumby said it had become apparent that Labor could not salvage power, even as the crucial 45th seat the opposition needs to govern hung in the balance.

“Although the seat of Bentleigh is still not declared it would take an extraordinary shift in those preferences, something like 70-30 with the remaining votes to be counted, and so therefore the most likely outcome of this election is a coalition victory of 45-43,” he said.

“Obviously the election result is very disappointing for me personally and I know for the cabinet and the caucus and for the Labor party.”

Just over an hour after Mr Brumby conceded defeat, coalition leader Ted Baillieu visited governor David de Kretser to be installed as the new premier.

Mr Baillieu had earlier held a two-hour meeting of his shadow cabinet to prepare for government.

He said his first priority was to provide “stable, disciplined, responsible government”. It’s a devastating blow for Mr Brumby, 57, who has now twice failed at the ballot box, first as opposition leader in 1996.

The politician of almost 30 years was handed the leadership from predecessor Steve Bracks in July 2007 and was desperate to be elected premier in his own right.

In a speech that lasted about 20 minutes, Mr Brumby took no questions and his future remains unknown.

It is likely he will step down from the leadership but he has previously committed to see out his four-year term representing the seat of Broadmeadows.

Health Minister Daniel Andrews is touted as a likely successor to lead Labor in opposition.

Earlier, the soon-to-be installed premier told reporters his phone had “melted” with messages of support and his government’s first priority would be improving community safety and public transport.

“I would say that everybody, as I have said many times, is relishing the opportunities which lie in front of us but we’re also very sanguine about the work that needs to be done and we know that there’s a lot of hard work in front of us all,” Mr Baillieu said.

He said he would not change his front bench.

The Liberal-Nationals have provisionally won 13 extra seats, giving them 45 of the 88 lower house seats and a mandate to govern. Among the scalps lost in the crushing swing of about six per cent were two ministers and the speaker.

Mr Brumby addressed the media shortly after speaking to Mr Baillieu to congratulate him and wish him success.

He was bullish about Labor’s achievement in government and put the loss down to the perils of a three-term government.

“There is no doubt we leave Victoria a stronger, better and fairer place than we found it 11 years ago,” he said.

“That’s not to gloss over or to airbrush over the issues that were raised during the campaign, but I think the simple fact of politics is that governments seeking to serve a mandate for well in excess of a decade, face an extremely difficult time.”

Mr Brumby spoke proudly of Labor’s economic stewardship of the state through the global financial crisis and jobs creation. He also talked up Labor’s investment in health, education and social reform, including the decriminalisation of abortion. But he acknowledged population growth had brought its problems, alluding to challenges like public transport and housing affordability.

In his speech he acknowledged the contribution of Mr Bracks and was briefly overcome with emotion as he thanked his wife and three children. And he said he could not have asked for a better cabinet and personal staff.

At Mr Brumby’s media conference, the former premier ignored a question from the media about his future as he left the room.