Gerhard Schroeder and his Social Democrats won national elections Sunday, ushering in the first change of government Germany has seen after 16 years of conservative rule under Chancellor Helmut Kohl, the West's longest-serving leader.

The new, 54-year-old chancellor will be the first of his generation, rooted in the leftist movements of the 1960s, to lead Europe's biggest nation.Throwing up his arms in a victory salute, Schroeder promised cheering supporters he would keep pledges to fight unemployment - this year's major campaign issue - as well as achieve long-awaited tax and economic reforms.

"The Kohl era has come to an end," Schroeder proclaimed to the cheering party faithful. "Our task will be to thoroughly modernize our country and to unblock the backlog of reform."

The defeated Kohl will be remembered best as the chancellor who unified communist East Germany with the West in 1990, after the fall of the Berlin Wall.

Schroeder, too, will have his shot at history as he oversees two monumental changes next year: the government's return to Berlin, its prewar capital, and the switch from the trusted German mark to the European common currency, the euro.

Kohl, 68, looked tired and sad as he conceded defeat.

"This is a hard evening for me, and for us all," Kohl told his supporters. "I wish Herr Schroeder the best of luck and a successful time in office." He also announced he would not run for re-election as chief of his party, likely making way for his protege, Wolfgang Schaeuble, to succeed him.

Schroeder supporters streamed into the streets of Bonn, holding balloons and chanting "Kohl must go!" Many voters have known no other chancellor but Kohl, and the promise of change brought tears of joy at party headquarters.

"Finally, finally. I have rarely been so happy," said Uta Tiedtke, 51, dabbing her eyes as she stood among the revelers. "My two children have never known anything other than Kohl. This means the end of stagnation. We've been waiting for this so long."

Schroeder, the popular governor of Lower Saxony state, has tried to move his traditionally leftist party toward the political middle to appeal to the widest possible audience. His party's victory adds momentum to the wave of center-left governments across Europe, after Britain's Tony Blair and France's Lionel Jospin.

Schroeder told the ARD television network that he would begin talks Monday on building a coalition. His party won 41 percent of the vote, according to early official results, giving it the right to form a government with Schroeder at its head. The Christian Democrats won 35 percent.

Kohl's government will continue in a caretaker role until a new coalition is formed. There is no deadline under the German constitution.