Mr Nikolic has 50.21% of the vote, against 46.77% for Mr Tadic, with 40% of votes counted.
The contest had been seen as a vote on EU membership and the newly-elected president promised that "Serbia will not stray from its European path".
Mr Tadic appealed to keep "Serbia's strategic orientation towards the EU".
"It would be a tragic mistake if Serbia changes its orientation. It is a matter of peace and economic development," he said.
Speaking of Tomislav Nikolic, he added: "I congratulate him on the victory, it was a fair and well-earned victory and I wish him luck."
As he confirmed his commitment to Europe, Mr Nikolic claimed "This is a turning point for Serbia... these elections were not about who will take Serbia to the EU, but who will solve the economic problems created by the Democratic Party (of Boris Tadic)".
Serbia is plagued by unemployment of 24% and foreign debt of 24bn euros (£19.5bn; $31.5bn).
Source: BBC News
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