Businessman Grant Smith, the Palmerston North city councillor tipped in a Manawatu Standard Versus poll to be the city's next mayor, has won the by-election.

The election night results have just been announced in the city council chamber by electoral officer John Annabell.

Smith, 48, made his first bid for the council in 2013, entering the by-election race prompted by Jono Naylor's resignation last year when he was elected to be a National list MP.

Smith said the hard work would begin tomorrow, with a meeting with chief executive Paddy Clifford already booked in.

Moments after his by-election success was announced, Smith said the victory felt surreal, although he had kept positive throughout the campaign.

With three councillor colleagues defeated but pledging their support, he said the task now was to build the council into a team that would put Palmerston North first.

He edged out three other city councillors for the top job – long-serving members Lew Findlay and Vaughan Dennison, and second term councillor Tangi Utikere.

His final vote count in the single transferable vote election was 11,469, ahead of Utikere on 9249.

The voter turnout was 42.8 per cent, an improvement on the 38.7 per cent return in the October 2013 local body elections in Palmerston North.

There were five contenders from outside the council.

A keen sportsman, Smith was a leading light in the Save the Turbos campaign, attracted World Squash events to the city, and is on the Manawatu Rugby Board.

He has run a "winning team" campaign, with backing from fellow councillors Duncan McCann and Leonie Hapeta, and with financial help from a member of Palmerston North's Higgins family.

Smith launched his campaign with a promise for an hour's free car parking in the central city.

Smith is married to Michelle and has two children.