Mr Hatoyama, elected with a sweeping mandate for change, is faced with record unemployment and an ageing society.
Yesterday's win by the Democratic Party of Japan breaks a deadlock in parliament and will usher in a government that has promised to focus spending on consumers, cut wasteful budget outlays and reduce the power of bureaucrats.
The defeated Liberal Democratic Party (LDP), which had ruled Japan for most of the last half-century, suffered its worst election performance since the party was founded in 1955.
'It's taken a long time, but we have at last reached the starting line,' Mr Hatoyama today told a news conference at his home in Tokyo.
'This is by no means the destination. At long last we are able to move politics, to create a new kind of politics that will fulfil the expectations of the people.'
Mr Hatoyama is to set up a transition team to organise the change of government.
He says he will not announce his cabinet until he is officially elected prime minister by a special session of parliament, probably in two weeks' time.
Investors welcomed the end to a political deadlock that has stymied policies as Japan struggled with its worst recession since World War II.
Early results show the Democrats won about 308 seats in the lower house, nearly tripling their strength in the 480-member chamber. The LDP won only 119 seats, down from 300.
