The UK Prime Minister said voters had delivered a “sobering verdict” on his party after 14 years in power.
Labour leader Keir Starmer said people around the country had declared they were “ready for change”.
In his acceptance speech after retaining his Richmond and Northallerton seat, Mr Sunak said: “The Labour Party has won this General Election and I have called Sir Keir Starmer to congratulate him on his victory.”
Keir Starmer will be Britain's next prime minister with his center-left Labour Party expected to win a huge majority in a parliamentary election, ending 14 years of often tumultuous Conservative government by trouncing Rishi Sunak's party.
With many results still to be announced from Thursday's vote, centre-left Labour has already won more than 326 of the 650 seats in parliament, with an exit poll suggesting it would capture about 410.
On a humiliating night for Sunak, the Conservatives have so far only won 70 and were predicted to suffer the worst performance in the party's long history with voters punishing them for a cost of living crisis, failing public services, and a series of scandals.
"Tonight, people here and around the country have spoken and they're ready for change, to end the politics of performance, a return to politics as public service," Starmer said after winning his seat in London.
"The change begins right here ... You have voted. It is now time for us to deliver."
Sunak conceded defeat and said he had called Starmer to congratulate him on his victory.
"Today power will change hands in a peaceful and orderly manner, with goodwill on all sides," he said after regaining his seat. "There is much to learn and reflect on and I take responsibility for the loss to the many good hardworking Conservative candidates ... I am sorry."
