The pro-Kurdish People's Democratic Party (HDP) will surpass the 10-percent barrier needed to send MPs to parliament, meaning the AKP will need to form a coalition for the first time since it first came to power in 2002, results based on a 75-percent vote count showed.
The AKP secured 43 percent of the vote, followed by the Republican People's Party (CHP) and Nationalist Movement Party (MHP), with the HDP fourth on 11 percent, according to the results broadcast on television.
The CHP is set to reap 24 percent of the vote and the MHP 17 percent, the results said.
This will equate to 267 seats in the 550-seat parliament for the AKP, 124 for the CHP, 85 for the MHP and 74 for the HDP, the NTV and CNN-Turk channels said in a projection.
This would leave the AKP short of the majority and also wreck President Recep Tayyip Erdogan's dream of agreeing a new constitution to switch Turkey from a parliamentary to a presidential system.
Such a change would have required a two-thirds majority in the parliament.
Erdogan -- premier from 2003-2014 before becoming president -- wanted to be enshrined as Turkey's number one and strengthen the office of the presidency which was largely ceremonial until his arrival.
The AKP's share of the vote is also well down on its score of almost 50 percent in the last legislative elections in 2011.