MILLIONAIRE businessman Horacio Cartes of the opposition Colorado Party, a political neophyte, has won Paraguay's presidential election, electoral officials say.

Cartes took 45.91 per cent of the votes, compared to 36.84 per cent for Efrain Alegre of the ruling Liberal Party, who has conceded defeat, Electoral Board chief Alberto Ramirez said on Sunday.

Voters were turning the page on a political crisis that saw leftist president Fernando Lugo impeached 10 months ago. The new president takes over from Lugo on August 15.

Cartes, a 56-year-old conservative tobacco baron, had been the favourite ahead of the economist Alegre, 50.

They traded accusations of corruption and links to drug trafficking in a highly negative campaign.

The conservative Colorados held Paraguay's presidency for 60 years until being ousted by Lugo in 2008, thanks to a united liberal coalition.

By contrast, Cartes, one of Paraguay's wealthiest men, is a relative newcomer on the political scene. He did not join the Colorado Party until 2009, and says he only voted for the first time the following year.

Paraguay is plagued by drug trafficking, smuggling and pirating of copyrighted materials like music and movies, and corruption is pervasive.

During the election campaign, Alegre - a self-styled crusader against crime and corruption - highlighted Cartes's brief 1985 jail stint for his role in a currency smuggling affair, while Cartes accused Alegre of embezzling $US25 million ($A24.44 million) in government funds.

The leftist Alegre, 50, was an activist who fought passionately against the dictatorship of Paraguay's strongman, who ruled the country between 1954 and 1989.

A mostly rural country of 6.5 million bordered by Brazil, Argentina and Bolivia, Paraguay is replacing Lugo, a former Roman Catholic bishop who was ousted 10 months ago by the opposition-controlled legislature after a police eviction of farmers left 17 people dead.

Lugo's administration was rocked by a sex scandal, after he was forced to admit to having fathered two children out of wedlock while he was still a priest, and he faces at least two other as-yet unresolved paternity suits.

Now, the leftist coalition that swept him to power has split, although Lugo is again on the ballot - this time as a Senate candidate.

Paraguay's 3.5 million voters are also casting ballots for the country's legislature and 17 governors.

Since Lugo's impeachment, Liberal Federico Franco has led the country. He did not seek re-election.

Most Latin American countries saw Lugo's impeachment as a legislative coup d'etat, and Paraguay's membership in the Mercosur common trade bloc and the Unasur regional group has been suspended.