Voters handed German Chancellor Angela Merkel's conservatives their worst-ever result in Hamburg on Sunday, punishing them for flirting with the far-right in an eastern state and descending into a messy leadership battle.
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Preliminary results also showed the far-right Alternative for Germany (AfD) scraping into the Hamburg parliament, only four days after a racist gunman killed 11 people, including himself, in the western town of Hanau.
The Social Democrats (SPD) and Greens celebrated in Germany's second-biggest city after taking first and second place, meaning they will probably keep ruling together in the northern port and city-state.
The conservative Christian Democrats (CDU) suffered after party leader and Merkel protege Annegret Kramp-Karrenbauer said she would stand aside, blowing open the race to succeed the chancellor and throwing the party into turmoil.
The CDU slipped into third place, scoring just 11.2 per cent. The AfD, which has capitalised on anger over Merkel's open-door migrant policy, especially in the former Communist East, won 5.3 per cent, just over the 5 per cent threshold needed to get into the state parliament, according to the preliminary results.
Kramp-Karrenbauer's move came after an eastern branch of the CDU defied the national party and voted with the AfD to install a state premier from a third party - breaking a postwar consensus among established parties of shunning the far-right.
"It is a bitter day for the CDU in Germany and a historically bad result in Hamburg," said CDU Secretary General Paul Ziemiak.
Merkel, chancellor for almost 15 years, has said she will not run again in the next federal election, due by October 2021.
Australian Associated Press