Workers' Party (WP) chief Pritam Singh will be formally appointed Leader of the Opposition, said Prime Minister Lee Hsien Loong.
And Mr Singh, whose party now has 10 MPs in Parliament, will be given the staff support and resources to carry out this role, PM Lee added.
Speaking early this morning after the polling results, PM Lee said the election results show a clear desire for a diversity of voices in Parliament.
He said: "Singaporeans want the PAP to form the government, but they - and especially the younger voters - also want to see more opposition presence in Parliament." He added that he had called Mr Singh to congratulate him on his party's strong performance.
PM Lee said he looks forward to the 10 new opposition MPs and two Non-Constituency MPs (NCMPs) participating in and contributing to debates in Parliament, as well as to the national debate as Singapore deals with the urgent issues before it.
Early this morning, the WP secured 10 seats in three constituencies. It won with 61.19 per cent of the votes to retain its hold on the single-seat constituency of Hougang, and 59.93 per cent in the five-member Aljunied GRC, which it has held since 2011.
It also added another GRC to its stable by winning 52.13 per cent of the votes in the four-member Sengkang GRC.
PSP chief Tan Cheng Bock has said he will not take up the offer of an NCMP seat, and that he will leave the choice to the party's central executive committee.
Speaking to reporters at a virtual press conference in the early hours of the morning, PM Lee noted his earlier remarks on Nomination Day that this election would be a tough fight for the ruling party. Opposition parties had warned of a wipeout, but he had completely disagreed. He turned out to be right, PM Lee said.
Deputy Prime Minister Heng Swee Keat, whose five-member team won 53.4 per cent of the votes in East Coast GRC, added that he had spoken to two members of the opposing team, Mr Terence Tan and Ms Nicole Seah.
Mr Heng said: "They said that, look, we must work together and this is about Singapore... the interests of Singapore and Singaporeans. So I look forward to the Workers' Party playing a constructive role and putting national interest before party interest."
PM Lee said that an election is an "act of collective choice" and Singaporeans have now chosen the PAP as the government.
"I ask every citizen to support the team that you have chosen and to work with us," he said.
He added: "Now that the election is over, we need to put all our differences aside, close ranks, and work together on the task at hand, which is to get us through the crisis safely.
"The challenges ahead call for not only a whole-of-government response, but a whole-of-nation response, and that work has continued throughout this campaign and will carry on starting tomorrow."
Correction note: An earlier version of this article described Aljunied as a four-member GRC and Sengkang as a five-member GRC. This has been corrected. We are sorry for the error.