In an eight-sentence statement, the longest serving Republican in Senate history said not enough ballots remain uncounted for him to catch Democrat Mark Begich, who holds a 3,724-vote lead out of about 315,000 ballots cast.
Stevens was attempting to become the first felon to be elected to the Senate. He was convicted last month by a federal jury in Washington, D.C., of lying on Senate disclosure forms to conceal more than $250,000 in gifts and home renovations from an oil field services company.
Stevens said Tuesday that he will not ask President Bush to give him a pardon for his seven felony convictions.
Stevens never directly mentioned his legal ordeal Wednesday but thanked "the thousands of Alaskans who stood by us."
"I am proud of the campaign we ran and regret that the outcome was not what we had hoped for," Stevens said. "I am deeply grateful to Alaskans for allowing me to serve them for 40 years in the U.S. Senate. It has been the greatest honor of my life."
The votes that gave Begich a winning margin were tallied on Tuesday, Stevens' 85th birthday.
The senator's statement was released just minutes after Begich, 46, the two-term Anchorage mayor, met with reporters and said he had not heard from Stevens. Begich said he had received congratulations from other leading Republicans, including Gov. Sarah Palin and Sen. Lisa Murkowski.
A smiling Begich described his election as a fundamental shift in the Alaska political landscape long dominated by Republicans. But he also made clear he was not a conventional Washington Democrat, citing his support for gun rights and drilling in the Arctic National Wildlife Refuge in the state's northern reaches.
"Anybody who knows me knows that I'm a different Democrat I'm from Alaska," he said. Along with firearm rights and drilling, "Alaskans are very libertarian in issues where the government shouldn't interfere in their personal lives."
He said he was "definitely different than a New York Democrat."
Stevens' defeat moves Senate Democrats closer to the 60-vote majority needed to end a delaying tactic known as a filibuster used to obstruct passage of legislation.
Democrats hold 58 seats, when two independents who align with Democrats are included, with undecided races in Minnesota and Georgia where two Republicans are trying to hang onto their seats.
With this win, Democrats have picked up seven Senate seats in the Nov. 4 election.
Stevens' ouster marks an abrupt realignment in Alaska politics and will alter the power structure in the Senate, where he has served since the days of the President Lyndon B. Johnson's administration, holding seats on some of the most influential committees in Congress.
The crotchety octogenarian occupies an outsized place in Alaska history. His involvement in politics dates to the days before Alaska statehood, and he is esteemed for his ability to secure billions of dollars in federal aid for transportation and military projects. in the state. The Anchorage airport bears his name; in Alaska, it's simply ``Uncle Ted.''
With Stevens gone "it's a big gap in dollars - billions of dollars - that none of the other members of the delegation, Begich, whoever, could fill," said Gerald McBeath, chair of the political science department at University of Alaska Fairbanks. "There is no immediate replacement for him."
Begich will be the first Democrat to represent Alaska in the Senate in nearly 30 years. He is the son of Nick Begich, Alaska's third congressman, who died in a plane crash 1972 while running for re-election.