Turkish President Recep Tayyip Erdogan and his ruling party suffered a crushing defeat at the ballot box Sunday, as results showed the government losing its single-party majority for the first time since sweeping to power in 2002.

With nearly all the votes counted, the governing Justice and Development Party (AKP) received 41% of the vote, according to broadcaster CNN Turk.

The outcome sounds the death knell for Erdogan's hopes of changing the constitution to concentrate more power in an executive presidency, while denying his Islamist-rooted government the number of seats needed to form a government alone.

Sunday's historic vote ushers in a new era for Turkey's largest ethnic minority. The pro-Kurdish People's Democratic Party (HDP) was on track to win 13% of the vote — well above the 10% threshold for representation in Parliament — having restyled itself as a liberal party that represents the country's disenfranchised minorities and voters angry with Erdogan's increasingly authoritarian rule.

HDP leader Selahattin Demirtas called his party's ability to cross the threshold a "fabulous victory for peace and freedoms" that came despite fierce campaigning by Erdogan. "As of now the discussions on a presidential system, a dictatorship has come to an end," he said, the Associated Press reported.

Despite the blow to the governing party, Turkish Prime Minister Ahmet Davutoglu was defiant, claiming that the AKP "emerged victorious" in Sunday's vote.

Soner Cagaptay, a fellow at the Washington Institute for Near East Policy, called HDP the winner of the election "and the loser is Erdogan's presidential ambition."

"The takeaway is that Turkey is too big and too diverse for the AKP or any other party to control single-handedly. The other significant takeaway is Kurds their future is really intertwined with the future of Turkey," Cagaptay said.

The result marks the first time that a Kurdish party will sit in the Turkish Parliament. Wild celebrations erupted in the predominantly Kurdish city of Diyarbakir, an HDP stronghold. Across the city, cheering supporters took to the streets, honking car horns, setting off fireworks and shooting off rounds of celebratory gunfire.

"This is a historic day for the Kurdish people, but also for democracy in Turkey," said Vesi Hassan, 37, a construction worker. "With the HDP in Parliament, we will finally see an end to the bloodshed."

The HDP is expected to play a significant role in advancing the stalled peace process between the Turkish state and the Kurdistan Workers Party (PKK), which was aimed at ending an insurgency in the southeast that has killed 40,000 people over three decades. The Kurds, who account for roughly 20% of Turkey's population of some 80 million, have long-sought greater rights and more autonomy after years of being ostracized by the government.

The vote took place under the shadow of violence. On Friday, twin bomb attacks ripped through a crowded HDP rally in the center of this city, killing three and wounding at least 200. Many HDP supporters who voted Sunday said the attacks only strengthened their resolve to vote.

"Peace — the only thing we want is peace," said Hasim Fidan, whose 62-year-old mother lost both of her legs in the attack. Speaking outside of Dicle University Hospital, where his mother was in critical condition, Fidan said he left her side for the first time that morning to vote.

"The Kurdish people have seen a lifetime of bloodshed. I voted for the HDP today because it is time for this bloodshed to stop," he said.

The AKP will likely be forced to form a coalition government, which analysts say could open a new period of heightened political instability and uncertainty. Turkey's economy, which is already grappling with sluggish growth and rising unemployment, could take a further hit, said Wolfango Piccoli, managing director at Teneo Intelligence, a New York-based risk consulting firm.

While critics have expressed concern about Erdogan's increasingly autocratic rule, Piccoli warned that the election results may not immediately herald change in this NATO ally country.

"Erdogan is unlikely to alter his overall stance, governing style and policy agenda in the aftermath of this electoral defeat," Piccoli said. "On the contrary, the risk is that he may double down, feeling under pressure. Erdogan's authoritarian brand of politics will remain polarizing, and tensions within the country will continue to run high as long as he is in office.

The AKP will have 45 days to form a coalition government, and if unable to do so, Erdogan could call an early election.