Germany's far-right AfD won a landslide victory in a key regional election Sunday in the ex-communist east, a result seen as a stinging rebuke for Chancellor Friedrich Merz, but looked set to miss out on an absolute majority to govern alone.

"We have made history today," said a jubilant Ulrich Siegmund, the 35-year-old lead candidate of the anti-immigration Alternative for Germany party in Saxony-Anhalt state, as the vote count continued.

The AfD won 44 percent, more than doubling its support, and far ahead of the around 18 percent for the centre-right CDU of Merz, according to projections by public broadcasters ARD and ZDF.

The CDU's state premier Sven Schulze called the outcome "a severe blow" but will stay on as caretaker leader during what could be a long and painful process toward a new state government.

All major parties have agreed on a "firewall" of non-cooperation with the AfD, whose state branch is categorised as "right-wing extremist" by Germany's domestic intelligence agency.