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The ousted politician said he was taking"moral"responsibility for the defeat. Ahmad Zahid Hamidi will take over as UMNO boss and Hishammuddin Hussein will be deputy leader.

The ban on Najib and his wife leaving the country came shortly after he announced plans for a short holiday.

A leaked flight manifesto shows Najib and Rosmah were due to leave on a private jet on Saturday to Jakarta,fuelling rumours he was fleeing the country to escape possible prosecution over a massive corruption scandal involving the 1MDB wealth state fund.

Najib's statement on social media didn't say where he was heading said he was committed to"facilitating a smooth transfer of power."He apologised for his mistakes and shortcomings and said he intended to continue serving the people.

"I pray that after this divisive period,the country will unite,"he said.

The Immigration Department,which had initially said there was no travel blacklist for Najib,later issued a brief statement saying the couple"have just been blacklisted from leaving the country."

Najib responded swiftly by saying he respected the department's ruling and would stay with his family in Malaysia.

Vehicles pass by a campaign poster of defeated Najib Razak on display along a street in Kuala Lumpur.Credit:AP

Barisan Nasional won only 79 of the 222 parliamentary seats,losing power to Mahathir Mohamad's four-party alliance amid public anger over the wealth fund scandal and rising cost of living.

It was a remarkable comeback for Mahathir,who was prime minister for 22 years until his retirement in 2003.

Mahathir,now the world's oldest elected leader at 92,has said his government would not go seek revenge over the 1MDB fiasco but that Najib would have to face the court if he was found to be responsible.

The fund was started by Najib when he took power in 2009,but it accumulated billions in debts and is being investigated in the US and several other countries. US investigators said Najib's associates looted $US4.5 billion from the fund,of which $US681 million landed in Najib's bank account and some $US30 million used to buy jewellery for his wife.

Najib denies any wrongdoing. He sacked critics in his government including an attorney-general and a deputy prime minister and muzzled the media. The new Attorney-General Mohamed Apandi Ali cleared Najib in 2016,saying the money was a donation from the Saudi royal family and that most of it was returned.

Mahathir,who is due to name his cabinet later on Saturday,has indicated that Attorney-General Mohamed Apandi would be axed for hiding evidence of wrongdoing.

with AP