Rep Tillis led Mr Cunningham by more than 95,000 votes, or 1.76 percentage points with 98 per cent of the vote counted.
“I just called Senator Tillis to congratulate him on winning reelection to a second term in the U.S. Senate and wished him and his family the best in their continued service in the months and years ahead,” Mr Cunningham said in a statement.
He added: “While the results of this election suggest there remain deep and political divisions in our state and nation, the more complete story of our country lies in what unites us; our faith and sense of confidence in our democracy, our civic values and common humanity."
The concession comes after a controversial final run-up to election day, with Mr Cunningham facing a sex scandal over extramarital activities in the final days of the closely contested race.
Mr Cunningham acknowledged at the beginning of October that he exchanged sexually suggestive texts with a woman who is not his wife.
The Associated Press later reported additional texts and interviews confirming they had an intimate encounter as recent as July amidst the campaign for the Senate.
Rep Tillis benefited from the controversy of the scandal in the campaign’s final month, which prompted Mr Cunningham to reduce his in-person appearances and avoid questions surrounding the alleged affair.
“Earlier this afternoon, Cal Cunningham called me to offer his concession. This was a hard-fought campaign and I wish nothing but the best to Cal and his family going forward,” Rep Tillis wrote on Twitter following the concession.
“I know that my job is fighting for the jobs of the hardworking people of our state, which is why my first post-election priority will be defeating Covid-19 and getting the economy back on track.”
The hard fought race became the most expensive in US history. The two campaigns and outside groups combined spent $282m on the general election, according to the Center for Responsive Politics.
However, following the news of Mr Cunningham’s sex scandal, Rep Tillis and his Republican allies suggested that the controversy undermined the trustworthy persona the former Army officer had presented to the electorate.
“I’ve taken responsibility for the hurt that I’ve caused in my personal life. I’ve apologised for it,” Mr Cunningham said of the scandal on 9 October. “I’ve said what I’m going to say about it.”
The conclusion of the closely watched race marks an important tipping point for Republicans in this year's battle for the Senate, with Rep Tillis’ win pushing the GOP ahead with 49 seats to the Democrats 48.
All eyes will now inevitably turn to be on the two runoff elections in Georgia slated for January 2021, with Republican Dan Sullivan leading the race in Alaska.
Currently, Democrats have a net gain of one seat in the US Senate in this year's election and need to secure two more seats to gain control, leaving vice president-elect Kamala Harris with the deciding vote.
Additional reporting by the Associated Press
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