McDonnell's victory over Democrat Creigh Deeds ends eight years of Democratic control of the governorship.
The Republican was favored to win the race and had been leading by double digits in almost every poll. The race hinged in large part on economic concerns -- McDonnell pitched himself to voters as the "jobs governor."
With 46 percent of precincts reporting, McDonnell had 62 percent and Deeds had 38 percent.
Republican Lt. Gov. Bill Bolling also won a second term Tuesday, defeating Democrat Jody Wagner. And Republican state Sen. Ken Cuccinelli is the winner of the race for state attorney general, beating Democratic state Del. Steve Shannon.
Deeds, a state senator, was watching elections returns at the Westin Hotel in Richmond with his wife, Pam, and his four children. Also joining the Deeds family is his college friend Bobby Taylor.
McDonnell, the former attorney general, is also in Richmond where he was holding a rival party at the Marriott.
President Obama, who was the first Democratic presidential candidate to win the state in decades last year, campaigned for Deeds in Norfolk last week. But with Deeds continuing to trail, Obama shifted his attention to the New Jersey governor's race in the run-up to Election Day.
The New Jersey race between Democratic Gov. Jon Corzine and Republican challenger Chris Christie appears to be the closest of the major political battles Tuesday.
The White House also intervened in an upstate New York congressional race, where Democrat Bill Owens is facing off Tuesday against Conservative Party candidate Doug Hoffman. The special election is being held to replace John McHugh, a Republican who became Obama's Army secretary. Vice President Biden campaigned for Owens Monday.
Before the polls even close in New Jersey, Democrats and Republicans there are already bracing for a possible post-election court fight in the airtight race.
Democratic Party officials say they are fully prepared for any legal possibility should the race be unresolved in the next few days and end up in a recount or other messy scenario.
Republican National Committee Chairman Michael Steele said both parties have attorneys girding for battle.
"Are you kidding? They've been camped out there a week," Steele said.
New Jersey has no mandatory recount provision, but a request for one must be made within 15 days of an election.
