A poll released Friday indicated a potential coalition of Social Democrats and the resurgent Greens were poised to unseat Merkel's CDU and their coalition partner, the pro-business Free Democrats (FDP).
"This is a day that has strongly changed the political landscape in Germany," party chairwoman Claudia Roth said in Berlin.
The Greens secured 24.2 per cent of the vote, with the centre-left Social Democrats down 2 percentage points at 23.1 per cent. That secures them a narrow lead to form a coalition government with a combined 71 seats in the state legislature, the results showed.
"We have secured what amounts to a historic electoral victory," the Greens' local leader Winfried Kretschmann told party members in Stuttgart.
Germany has Proportional Representation in Parliament