South Korea Wednesday elected Park Geun-hye, the 60-year-old candidate of the conservative Saenuri party, as the country’s first woman president, signaling a new drive for greater engagement with rival North Korea.

Park, the daughter of a late dictator from South Korea’s authoritarian era, emerged winner in a tight race that pitted her against Moon Jae-in, the 59-year-old liberal candidate of the Democratic United Party and a former human rights lawyer.

North Korea is likely to watch the new president-elect with caution as it tries to decide how to react to the new conservative leader, Yonhap news agency has reported citing experts in Seoul.

Though both candidates had promised to pursue talks and step up aid to North Korea, Pyongyang criticized Park over her North Korea policy plans but did not make any comments on Moon.

Relations between the two Koreas were strained as a result of the outgoing Lee Myung-bak government's hardline stance towards the North.

Wednesday’s voting saw a turnout of 75.8 percent of the electorate, the highest in 15 years. Park won 51.6 percent of the vote to Moon's 48 percent.

Park will assume office in February 2013, at a time when Seoul is facing numerous challenges, including strained ties with Pyongyang, a slowing economy, an aging population and rising welfare expenditure.

Addressing crowds in Seoul's central Gwanghwamun Square, Park said her win was a victory for the people, the CNN reported.

"I will be the president of the nation who keeps pledges," she said.

"This is considered a victory for people who want to overcome crisis and revive the economy. I will never forget the will of the people who believed in me wherever I went during the election campaign,” she said. "I will start an era of happiness in the nation."

She mentioned Pyongyang’s recent long-range rocket launch during a nationally televised speech saying it “symbolically showed how grave our security reality is.”

Park, who has remained unmarried, is regarded in South Korea as a selfless daughter of the nation and a female lawmaker in a male-dominated political world, according to an Associated Press report.

President Barack Obama sent a congratulatory message to Park after the results were declared Wednesday.

"I look forward to working closely with the Park Administration to further enhance our extensive cooperation with the Republic of Korea on a wide range of important bilateral, regional and global issues," he said. "The U.S.-ROK alliance serves as a lynchpin of peace and security in the Asia Pacific, and our two nations share a global partnership with deep economic, security, and people-to-people ties."

Obama also praised Lee for what he said the outgoing leader "has done to strengthen U.S.-ROK relations and promote a Global Korea."