"These results are very severe," Aso said. "There has been a deep dissatisfaction with our party."
Aso informed that he would resign as party president. Though the official results would not be released till Monday, August 31 the other LDP leaders would resign.
Democratic Party headed by Yukio Hatoyama would replace Aso and establish a new Cabinet, possibly within the next few weeks.
National broadcaster NHK based on exit polls of roughly 400,000 voters, said the Democratic Party was set to win 300 seats and the Liberal Democrats only about 100.