Sinn Fein leader Michelle O'Neill on Saturday acclaimed a "new era" for Northern Ireland as her Irish nationalist party handed a historic election defeat to pro-UK unionists who had monopolised power for decades.

Once the political wing of the paramilitary IRA, Sinn Fein won enough seats in the devolved legislature to nominate O'Neill as first minister -- a century after Northern Ireland was carved out as a Protestant fiefdom under British rule.

O'Neill appealed for a "healthy debate" about reunifying Ireland, but the Democratic Unionist Party (DUP) stood by its refusal to form a new power-sharing government, opening up the prospect of months-long political limbo.

"Today ushers in a new era," said O'Neill, who at 45 came of political age after the 1998 Good Friday Agreement ended three decades of bloodshed in Northern Ireland.

Northern Ireland assembly
Northern Ireland assembly AFP / Kenan AUGEARD

"It's a defining moment for our politics and our people," she said.

"I will provide leadership which is inclusive, which celebrates diversity, which guarantees rights and equality for those who have been excluded, discriminated against or ignored in the past."

With 88 of 90 seats filled from Thursday's proportional voting, Sinn Fein was assured of 27 seats in the Stormont assembly, ahead of the DUP on a maximum of 25 and the cross-community Alliance party on 17.

"The people have spoken, and our job is now to turn up. I expect others to turn up also," O'Neill told reporters. She stressed that the new government had to tackle foremost a cost-of-living crisis in the UK, ahead of the debate about Irish unity.

'The people have spoken,' said Sinn Fein Deputy First Minister of Northern Ireland Michelle O'Neill (centre L)
'The people have spoken,' said Sinn Fein Deputy First Minister of Northern Ireland Michelle O'Neill (centre L) AFP / Paul Faith

The DUP occupied the role of first minister in the outgoing assembly, before it collapsed the executive in protest at post-Brexit trading rules between the UK and EU.

DUP leader Jeffrey Donaldson demanded that UK Prime Minister Boris Johnson "deliver on his word to honour the commitments he has given and to take the action that is necessary" on the Northern Ireland Protocol.

He urged "decisive action by the government to remove the Irish Sea border, because we don't believe it is acceptable or necessary to have checks on goods moving within the United Kingdom".

While Sinn Fein will get to nominate a first minister, Northern Ireland's government can only form under the 1998 deal if the DUP agrees to take part and serve in the role of deputy first minister.

With all but two seats filled, Sinn Fein is assured of 27 in the Stormont Assembly
With all but two seats filled, Sinn Fein is assured of 27 in the Stormont Assembly AFP / Paul Faith

"I want a government in Northern Ireland, but it has to be one based on stable foundations," Donaldson said.

"And the long shadow of the Northern Ireland Protocol is harming our economy, it's harming political stability."

Johnson's Northern Ireland Secretary Brandon Lewis was expected to meet the party leaders in Belfast on Monday. The parties will have 24 weeks to resolve their differences or face a new election.

In a statement, Lewis urged all the parties to form a new executive "as soon as possible".

Voters had made it clear they wanted "a fully functioning devolved government in Northern Ireland" and for the issues around the protocol to be addressed, he said.

Irish premier Micheal Martin said it was "now incumbent on all political parties and elected representatives to deliver on their mandate" to form an administration and "serve the interests of all of the people of Northern Ireland".

And US State Department spokesman Ned Price said: "We call on Northern Ireland's political leaders to take the necessary steps to re-establish a power-sharing executive, which is one of the core institutions established by the Belfast/Good Friday Agreement."

England, Wales and Scotland also voted in local and regional elections on Thursday, punishing the embattled Johnson's scandal-mired Conservatives but without a landslide for the main opposition Labour party.

The Scottish National Party strengthened its hold, and the result in Northern Ireland played into its own argument for separation from the UK.

SNP leader Nicola Sturgeon congratulated Sinn Fein's leadership "on a truly historic result".

Johnson is expected to lay out his post-election plans in the Queen's Speech in parliament on Tuesday, which will have to take into account the forming of a government in Northern Ireland, long riven by sectarian unrest.

The other big winner in Northern Ireland was Alliance, which said its strong showing in third place underlined the need for Northern Ireland to move past old divisions.