In a dramatic about-face, Icelandic voters have returned to power the centre-right parties that led the national economy to collapse five years ago.

With most votes counted early today, the Independence and Progressive Parties - who governed Iceland for decades before the 2008 crash - each had 19 seats in Iceland's 63-seat parliament, the Althingi.

The parties, who promise to ease Icelanders' economic pain with tax cuts and debt relief, are likely to form a coalition government.

Voters shunned the Social Democrat-led coalition that has spent four years trying to turn the country around with painful austerity measures. The Social Democrats took nine seats and coalition partners the Left-Greens seven.

Independence Party leader Bjarni Benediktsson says voters opted for "a plan that would bring us quicker out of the crisis".