The Progressive Conservative Party, led by Dennis King, won a minority government - having failed to secure the 14 seats needed to form a majority.
King was immediately congratulated by Prime Minister Justin Trudeau, who said he looked forward to working with him.
The Green Party was favorite in the polls, but failed to become the first party of its kind to lead a Canadian province, taking second place. However, leader Peter Bevan-Baker will be leader of the official opposition - a first in Canada.
Liberals and Conservatives had been in power since the province's creation in 1873.
The Liberal Party, which came in third, had since 2007 governed what is the smallest province in Canada - with outgoing premier Wade MacLauchlan seeking a fourth consecutive term.
"It's something that happens in politics," he told reporters. "The tide has changed."
Tuesday's results marked the latest in a series of right-wing victories at the provincial level in recent months, after Ontario, New Brunswick, Quebec and Alberta.
And it was another disappointment for Prime Minister Trudeau, who in six months faces federal elections - with polls showing Conservative Andrew Scheer as the favorite.
Trudeau is also in the middle of the most serious political crisis he has experienced in office, after his former attorney general unleashed accusations of political meddling in the criminal prosecution of a corporate giant.
In Prince Edward's Island, the election campaign ended on a tragic note, as a Green Party candidate and his son drowned after their canoe capsized. A by-election will be held in that constituency at a late date.
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