A predominantly Muslim area of the southern Philippines has returned a resounding "Yes" in this week's referendum on greater autonomy, boosting hopes for peace in one of Asia's most conflict-torn regions.

The plan to create a self-administered area for the Muslim-dominated parts of Mindanao was backed by 85 percent of voters, the election commission said late on Friday, paving the way for a three-year transition towards elections for a legislature that will choose an executive.

Monday's referendum was the culmination of a tumultuous peace process between separatists and successive governments that aimed to settle decades of conflict, which have hampered development and kept these parts of Mindanao among Asia's poorest regions.

The instability and high rates of unemployed, unschooled youth made the areas fertile recruitment ground for bandits and Islamist extremists, who exploited grievances about neglect and stoked narratives of government duplicity in the peace process.

The endorsement by some 1.74 million voters comes as no surprise, and the new region to be called Bangsamoro (nation of Moros) will have greater powers to generate and invest more money in infrastructure, schools, healthcare and social welfare for its estimated 5 million inhabitants.

A ballot will now be held on February 6 to ask several other areas if they want to join.