The head of Turkey's electoral board has since confirmed that the "yes" votes have won.
The post of prime minister will be abolished, with those powers transferring to the president.
Erdogan, who first came to power in 2003 as prime minister, had argued a "Turkish-style" presidential system would bring stability and prosperity to a country rattled by a failed coup a year ago and a series of devastating terrorist attacks.
Erdogan said he hopes the referendum results would benefit Turkey, and that the nation made a "historic decision", in an address after Yildirim's declaration.
People protest against the results of the referendum in Istanbul, Turkey April 16, 2017. "There are those who are belittling the result". Those two nations barred Turkish ministers from holding referendum campaign rallies within their borders, where millions of Turkish voters live.
Turkish special force police officers patrol streets after a vehicle bomb exploded near the stadium of football club Besiktas in Istanbul on December 10, 2016.
Opinion polls, always treated with caution in Turkey, predicted wildly divergent scenarios with analysts saying the outcome remains too close to call despite the clear advantage in resources and airtime enjoyed by the "Yes" campaign. They would also give the president enhanced veto power, the ability to pass presidential decrees equal to parliamentary-passed laws, and the power to dissolve parliament at will in favor of new elections.
The "yes" vote in the referendum would be a validation of the current leadership style of Mr. Erdogan, who has been acting as a de facto head of government since his election in 2014 despite having no constitutional right to wield such power.
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Erdal Aksunger, deputy chairman of the party, claimed "illegal acts" had been carried out in favour of the government in the referendum. "There are no losers in this referendum, the victor is Turkey, the victor is the dear people", he added. The results will be finalized by the Supreme Election Board (YSK), but the YSK put itself in the middle of a deep controversy by making a contentious announcement in the early stages of the beginning of the vote count. But one side is claiming victory and the other side says, not so fast.
Others offered their first, cautious, reactions. Members of the opposition, however, said the vote was marred by irregularities and vowed to challenge the result.
Austrian Foreign Minister Sebastian Kurz, said on Twitter that "it shows how divided the country is; Collaboration with the European Union will be even more complex". Kurz said on Twitter the result "shows how divided the country is". Supporters of the "no" vote have complained of an atmosphere of intimidation, with the main opposition party recording more than 100 incidents of obstruction to its campaign efforts, including beatings, detentions and threats.
"Erdogan dominated the national media".
A win for Erdogan will represent one of the most dramatic overhauls of the country's democratic system since the republic was founded in 1923.
More than 55 million people in the country were registered to vote, while another 1.3 million Turks cast ballots overseas.
Voting began at 7 a.m. but there was no question on the ballot, just an option for "yes" or "no".
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