With about a third of the votes counted, Ms Ardern’s liberal Labour Party has nearly double the amount of votes of its main challenger, the conservative National Party.
One question will be whether Labour can win an outright majority in parliament, something that has not happened since New Zealand implemented a proportional voting system 24 years ago.
Typically, parties must form alliances to govern, but this time there is a chance Ms Ardern and Labour will be able to go it alone.
A record number of voters cast early ballots in the two weeks leading up to the election.
On the campaign trail, Ms Ardern has been greeted like a rock star by people who have crammed into shopping malls and spilled onto streets to cheer her on and get selfies with her.
Her popularity soared earlier this year after she led a successful effort to stamp out the coronavirus.
There is currently no community spread of the virus in the nation of five million and people are no longer required to wear masks or socially distance.
Typically, parties must form alliances to govern, but this time there is a chance Ms Ardern and Labour will be able to go it alone.
Ms Ardern’s rival, 61-year-old National Party leader Judith Collins, earlier said she still believes she can win and that polls have been wrong before, notably about Brexit and the 2016 US presidential election.
The 40-year-old prime minister won the top job after the 2017 election when Labour formed an alliance with two other parties.
The following year, Ms Ardern became only the second world leader to give birth while in office.
She became a role model for working mothers around the world, many of whom saw her as a counterpoint to US president Donald Trump.
And she was praised for her handling of last year’s attack on two Christchurch mosques, when a white supremacist gunned down 51 Muslim worshippers.
She moved quickly to pass new laws banning the deadliest types of semi-automatic weapons.
In late March this year, when only about 100 people had tested positive for Covid-19, Ms Ardern and her health officials put New Zealand into a strict lockdown with a motto of “go hard and go early”.
She shut the borders and outlined an ambitious goal of eliminating the virus entirely rather than just trying to control its spread.
With New Zealand having the advantage of being an isolated island nation, the strategy worked.
New Zealand eliminated community transmission for 102 days before a new cluster was discovered in August in Auckland.
Ms Ardern swiftly imposed a second lockdown in Auckland and the new outbreak faded away. The only new cases found recently have been among returning travellers, who are in quarantine.
The Auckland outbreak also prompted Ms Ardern to postpone the election by a month and helped increase the early voter turnout.
Ms Collins is a former lawyer. She served as a minister when National was in power and prides herself on a blunt, no-nonsense approach, a contrast to Ms Ardern’s empathetic style.
The challenger is promising sweeping tax cuts in response to the economic downturn caused by the virus.
In the election, voters also have a say on two contentious social issues – whether to legalise marijuana and euthanasia.
Polls indicate the euthanasia referendum is likely to pass, while the marijuana vote remains close.
