Mrs Merkel urged her party to celebrate "a super result" as she looked set for a historic third term.
Her conservative bloc took about 41.5% of the vote - but her liberal partners failed to make it into parliament.
It is thought she is likely to seek a grand coalition with the Social Democrats (SPD) who won 26%.
Party chairman Philipp Roesler called it "the bitterest, saddest hour of the Free Democratic Party".
The FDP was beaten by the Green Party (8.4%) and the former communist Left Party (8.6%).
It almost finished behind the new Alternative fuer Deutschland (AfD), which advocates withdrawal from the euro currency and took 4.7%, just short of the parliamentary threshold.
Read more: BBC News - Angela Merkel celebrates after German election win
Her conservative bloc took about 41.5% of the vote - but her liberal partners failed to make it into parliament.
It is thought she is likely to seek a grand coalition with the Social Democrats (SPD) who won 26%.
The results showed that the liberal Free Democrats (FDP) won only 4.8%, which correspondents say is a disaster for the junior coalition partner, leaving it with no national representation in parliament for the first time in Germany's post-war history.
The FDP was beaten by the Green Party (8.4%) and the former communist Left Party (8.6%).
It almost finished behind the new Alternative fuer Deutschland (AfD), which advocates withdrawal from the euro currency and took 4.7%, just short of the parliamentary threshold.
Read more: BBC News - Angela Merkel celebrates after German election win
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