Democrats are set to win the final seat needed to take control of the US Senate, the Associated Press reports.
Jim Webb is celebrating but his victory has not been confirmed
AP declared Democrat Jim Webb victor in Virginia by 7,236 votes over Republican incumbent George Allen. Official results have yet to confirm a win.
Democrats have already taken the House of Representatives, and Defence Secretary Donald Rumsfeld has resigned.
President George W Bush is to meet key Democrat Nancy Pelosi, and has said he wishes to work with her party.
Mr Bush is to have lunch on Thursday with Ms Pelosi, who is to become the new Speaker of the House of Representatives.
Both have said they wish to establish a constructive relationship, but correspondents say this will be challenging after a bitter election campaign.
On Wednesday, the president said the Republicans had taken a "thumping" in Tuesday's vote, in which the Democrats gained control of the House for the first time in 12 years.
Ms Pelosi has called for a change in Iraq policy
Republican defeat in the mid-term polls has been blamed on the Iraq war, of which Mr Rumsfeld was a key architect.
Mr Bush named former CIA director Robert Gates as his new defence chief.
The Senate race has been hanging on Virginia. A Democrat win would leave both parties with 49 seats each.
Two independents have said they will vote with the Democrats, which would give the party the 51 votes they need to claim a majority for the first time since 2002.
In Virginia, Mr Allen will have the option to demand a recount if the margin from official results is less than half a percentage point.
But his aides were quoted as saying he did not want to drag out the process and was likely to make a decision in the coming hours.
AP called the race for the Democrats after contacting election officials in the state's 134 localities for updated figures.
Correspondents say the call reflects the general view that the margin of victory in Virginia is large enough to make it virtually impossible for any recount to change the outcome.
Control of the Senate and its committees would give Democrats the right to hold hearings and approve presidential appointments, including those to the Supreme Court.
McCaskill takes Missouri
Casey gains Pennsylvania
Brown gains Ohio
Whitehouse gains Rhode Island
Tester takes Montana
Webb projected to take Virginia
Senate Democratic leader Harry Reid claimed victory in Virginia.
"The American people have spoken clearly and decisively in favour of Democrats leading this country in a new direction," he said in a statement.
"In Iraq and here at home, Americans have made clear they are tired of the failures of the last six years."
President Bush said that he and Mr Rumsfeld had agreed that a "fresh perspective" was needed in Iraq.
Mr Rumsfeld had faced growing calls to quit as violence in Iraq has continued to spiral, three years after the US-led invasion.
"It's been quite a time," said Mr Rumsfeld in a short departing speech.
Ms Pelosi welcomed the resignation.
"I hope the departure of Mr Rumsfeld will mark a fresh start toward a new policy in Iraq, signalling a willingness on the part of the president to work with the Congress to devise a better way forward," she said.
The BBC's Matt Frei in Washington says Mr Rumsfeld's replacement, Robert Gates, is expected to bring a new spirit of collaboration to the Pentagon, but the situation in Iraq is such that options for changing US policy there are limited.