No single party will get a majority; the Socialist party of outgoing Prime Minister Pedro Sanchez is leading the race, and there will be lawmakers from the far-right Vox party.
To remain in office, Mr Sanchez will have to form a governing alliance with smaller parties.
"The Socialists have won the general election and with it the future has won and the past has lost", he told cheering supporters from the balcony of the party's headquarters in Madrid.
No matter which coalition comes into power, it's clear that its leader will be the socialist Pedro Sanchez.
Mr Sanchez ousted former prime minister Mariano Rajoy after a no-confidence motion in June previous year, and called a snap election after a budget stalemate.
Voters in Spain had become disillusioned as the country struggled with a recession, austerity cuts, corruption scandals, the divisive Catalan independence demands and a rise in far-right Spanish nationalism. The new party, founded in 2013 as an offshoot of the People's Party, won its first ever seats in a regional parliament in December 2018, gaining 12 seats in Andalucia's chambers.
The left Unidas Podemos alliance that received 42 seats has already expressed readiness to form a coalition with PSOE.
The arrival of Vox in Madrid's national parliament marks a big shift in Spain, where the far right has not played a significant role since the country's transition to democracy following the death of dictator Francisco Franco in 1975.
His Socialist party won almost 30% of the vote, but has fallen well short of a majority.
A Non-Baahubali Record From Mighty Avengers
However, one has to keep in mind that most of the Bollywood movies are single language unlike any of the films on the list below. There's little doubt that Endgame would easily join the $US 2 billion dollar club by the end of its run.
Most spectacularly, the vote for the previously all-conquering CSU, the Bavarian sister party of Angela Merkel's centre-right CDU, collapsed in October as a hardline campaign aimed at countering the far-right Alternative für Deutschland (AfD) failed to win back rightwing voters but offended its more moderate supporters.
Prime Minister Sánchez had called the third election the country has seen in three and a half years after his budget was defeated by Catalan separatists and the right-wing opposition.
Dolores Palomo, a 48-year-old domestic worker, said she had always voted for the Socialists but cast her ballot for centre-right Ciudadanos this time at a polling station in Hospitalet de Llobregat, near Barcelona, because Sanchez "is a puppet of the separatists".
Spaniards cast their votes in numbers close to record highs with campaigning dominated by national identity and cultural values like women's rights rather than the economy.
On Monday, the number two of the Ciudadanos party, Ines Arrimadas, completely shut down the idea of a coalition.
"Forming a government will be far from straightforward", Antonio Barroso, an analyst with the London-based Teneo Intelligence consultancy firm, said in a commentary Monday.
That controversy is likely to continue as two Catalan separatist parties gained even more lawmakers in the national parliament than they did in 2016 - up to 22 from 17.
Ciudadanos leader Rivera, whose party nearly overtook PP, told supporters his centrist option "keeps growing".
To do that in combination with Podemos, the Socialists would require the support of at least one lawmaker from the Catalan separatist camp.