With nearly 20 per cent of the vote counted, the CLP had notched a 13.2 per cent swing on a two-party preferred basis.
It came on the back of a strong primary vote of 49.5 per cent compared to the ALP's 25.9 per cent.
The CLP was on track to win 14 seats of the 25-seat parliament, with Labor set to take five seats as the others remain undecided.
Chief Minister Eva Lawler was trailing CLP candidate Clinton Howe 1235 votes to 630 in what pointed to a devastating loss in her own seat of Drysdale, with a swing of 22.6 per cent on a two-party preferred basis.
Chief Minister Eva Lawler has lost her seat and government in the territory election. ((A)manda Parkinson/AAP PHOTOS)
"Unfortunately, we have not got over the line tonight. It looks like I have lost my seat and I know some of our great candidates and great members have also lost their seats," Ms Lawler said in conceding defeat on Saturday.
"So, an absolutely sad night for Labor, but to all of you who are here, the people who have campaigned so hard for us, so hard for so long, I thank you from the bottom of my heart."
Former chief minister and Labor MP Natasha Fyles said the result was disappointing but paid tribute to Ms Lawler.
"Palmerston is tough. She was the first person to be re-elected as a Labor member with the redistribution but the other factors with the swing against the Labor Party has played into that," Ms Fyles told ABC Television."But it should not take away from the hard work she has done."
Early voting showed a strong swing towards the Country Liberal Party. ((A)manda Parkinson/AAP PHOTOS)
In the seat of Fannie Bay things were looking promising for Greens candidate Suki Dorras-Walker, who was leading the CLP in early voting.
A win there would be the first ever for the Greens in the territory.
"I just cannot believe what we've achieved on the ground," Ms Dorras-Walker said.
"We've spoken to so many people in Fannie Bay. We've got so many people behind us ... I'm so incredibly proud of this movement."
In the seat of Mulka, independent candidate Yingiya Mark Guyula was poised to defeat the CLP, promising to represent his country constituents.
"It does not matter to me whether it is an ALP or a CLP politician, as long as they listen to the voice from the people," Mr Guyula told ABC Television.
"And I am the voice for the people out here on the ground."
Key issues to emerge during the election campaign include the environment, crime and cost of living.
Fewer voters waited until polling day to cast their votes, choosing to pre-poll in high numbers. ((A)manda Parkinson/AAP PHOTOS)
AAP spoke to a number of voters concerned about rising rates of property theft.
NT Electoral Commissioner Kirsten Kelly said 61,000 people had voted early across the territory."So that's about 1000 votes more than in 2020 so early voting is quite popular voting for us," Ms Kelly said.
The participation rate had dipped from 75 per cent in 2020 to 65 per cent this election, Ms Kelly said.
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