David Cameron has congratulated Chancellor Angela Merkel on securing a third term win in Germany's federal elections.
The British Prime Minister called it "an historic result for chancellor Merkel and her party".
Just short of an overall majority at 41.5%, Merkel will be forced to make a new coalition after her former partners, the Free Democrats, failed to stay in parliament.
A No 10 spokesperson said: "Both leaders reaffirmed their commitment to continued co-operation between Germany and the UK."
Chancellor Angela Merkel scored a landslide victory in the German election, but has fallen short of the votes needed to win the first absolute parliamentary majority in over half a century.
That means she will be forced to seek a coalition partner, most likely the centre-left Social Democrats (SPD).
Angela Merkel's party has officially won the German election, hoisting their coalition partner out of Parliament according to the Associated Press.
It is not looking good for Germany's smaller parties - neither the Liberals nor the Eurosceptics are quite breaking the 5% barrier to get into Parliament.
German Chancellor Angela Merkel has said it is "too early to say exactly how we will proceed" in forming a government.
If her current coalition lacks a majority and her party cannot govern alone, the likeliest outcome is a Merkel-led alliance with the Social Democrats, the Associated Press reported.
The two are traditionally rivals, but governed Germany together in Merkel's first term after an inconclusive 2005 election.
"The ball is in Merkel's court," her center-left challenger, Peer Steinbruck, said. "She has to get herself a majority."
French President Francois Hollande has congratulated German Chancellor Angela Merkel on her election success.
Hollande also invited Merkel to come to Paris as soon as the new German government is formed, the president's office said.
Chancellor Angela Merkel told her supporters, "This is a super result," after exit polls suggested a triumphant election win for her party.
Projections from German broadcasters ARD and ZDF show a wide lead for Merkel's Christian Democratic Union against challenger Peer Steinbruck's Social Democrats.
Merkel said her party will do "everything" to make the next four years successful for Germany .
Chancellor Angela Merkel's Christian Democratic Union party is on course to win an historic absolute majority in the German election, according to a projection based on exit polls and some results from broadcaster ARD.
The projection puts the CDU on 42.5% - just above the combined total for the other parties who together scored 41.6%, Reuters reported.
The last time a German party won an absolute majority was in 1957 with conservative leader Konrad Adenauer.
Supporters of German Chancellor Angela Merkel's Christian Democratic Union (CDU) party cheered and sang as the first exit polls put their share of the vote at 42 percent.