The ruling Nepali Congress (NC), which faced its biggest electoral debacle ever, is set to sit in the opposition.
Mr Oli, whose party and the CPN (Maoist Centre) won a resounding victory, has said he would duly respect the opposition and take it along.
According to the Election Commission on Tuesday, the country's leftist alliance won 113 seats in Nepal's Parliament, while the NC won just 21 seats.
The leftist alliance was also leading in six out of seven newly-created provincial assemblies mandated in a new Constitution, which was officially adopted in 2015.
Mr Oli's campaign has called for the extension of the Chinese railway network into Nepal and implementation of hydroelectric, airport and other infrastructure projects to create jobs.
He briefly served as Premier from October 2015 to August 2016 but lost his seat when the Maoists dropped out of a coalition government and Mr Oli faced pressure to resign as leader of a minority government.
According to officials, CPN (Maoist Centre) chief and former Prime Minister Pushpa Kamal Dahal 'Prachanda' is likely to support Mr Oli's candidature for the Prime Minister's post while he would take the reins of the unified party. Mr Oli won from Jhapa-5 with 57,139 votes, defeating Nepali Congress' Khagaraj Adhikari who secured 28,297 votes.
The Election Commission is likely to count propositional representation votes by December 15 and submit the final election results to President Bidhya Devi Bhandari.
Mr Oli said the new government would take the opposition along and work with it, giving it the due respect. "We have seen in the past... victory often tends to make parties arrogant... I would like to assure... we ourselves have gone through such oppressions to arrive where we are today," the Himalayan Times reported.
"We know where it hurts," he said.
The country's Parliament is composed of 275 seats, 110 of which are allocated on a proportional representation basis. There are also 550 seats across the seven provincial assemblies.
Prime Minister Sher Bahadur Deuba, who also serves as chairman of Nepali Congress, won his seat from a constituency in western Nepal, but most senior leaders of his party were trounced in the polls.
Ram Sharan Mahat, a former Finance Minister of the Nepali Congress, said the party had suffered losses due to votes being less spread out.
"In earlier elections, votes had been divided among three main parties. But, after their alliance, it became a race between the two," said Mr Mahat. "Our party made several missteps in choosing candidates and presenting an image during the campaign," he said.
The elections, held in two phases on November 26 and December 7, capped the country's 11-year transition from monarchy to federal democracy.
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