Its coalition partner the anti-establishment Five Star Movement (M5S) was beaten by the centre-left Democratic Party (PD) which came second with 21-25 percent, exit polls showed after voting ended at 2100 GMT.
Luigi Di Maio's M5S garnered between 18.5-22.5 percent of votes, while tycoon and former premier Silvio Berlusconi's Forza Italia scored 8-12 percent.
“The League has probably become the top party in Italy,” the head of the party's Senate grouping Riccardo Molinari said after the exit polls were released.
The result for the anti-migrant League was not as high as some had predicted but appeared to confirm the party's stellar rise since forming a government in June last year.
Some analysts predicted that Salvini would want to call snap elections if the League obtained a high score, although he has denied this during campaigning.
“As far as I'm concerned, if the League wins nothing changes in Italy, everything will change in Europe, starting from tomorrow,” Salvini said on Sunday before exit polls were released.
The March 2018 general election in the eurozone's third largest economy saw the League take home just 17 percent of the vote, while the M5S — which set itself up as the honest, environmentally-friendly alternative to a corrupt old political guard — pocketed over 32 percent.
Analysts said that a strong League result — over 30 percent — could see Salvini tempted to ditch the M5S for the far-right Brothers of Italy (which won 5-7 percent on Sunday), or a fresh alliance with the party's historic partner, billionaire Berlusconi's centre-right Forza Italia.
In France far-right leader Marine Le Pen won her symbolic duel with President Emmanuel Macron on Sunday, as eurosceptic forces made strong gains in the EU parliamentary election.
Turnout EU-wide was estimated at 51 percent, the highest in 20 years, suggesting more than 200 million citizens across the 28-nation bloc voted in a poll billed as a battle between populists and pro-European forces.
Mainstream parties put up enough of a defence to keep a possible majority in the 751-seat assembly — and Green parties surged in western Europe — but Le Pen's victory in her head-to-head with Macron set the tone of the night.
Across Europe however, according to a projection prepared by the parliament, the centre-right European People's Party (EPP) is on course to have the most seats in the assembly with 173, down sharply from 216 in 2014.
With the centre-left Socialists and Democrats (S&D) projected to win 147, down from 185, the two mainstream parties will no longer have a majority and will have to reach out to liberals to maintain a “cordon sanitaire” and exclude the far-right from decision making.
Each previous EU election since the first in 1979 has seen turnout fall, but initial figures from across the 28-nation bloc suggested this year's culture clash has mobilised both populists and those who oppose them.