Democrat Terry McAuliffe is projected to win the Virginia gubernatorial race, defeating Republican nominee Ken Cuccinelli in a surprisingly close victory.

Fox News projected McAuliffe as the winner Tuesday night.

The closely watched raced pitted a Tea Party-backed Republican and an establishment Democrat locked in an expensive, ideological battle whose outcome is expected to set a course for the 2014 and 2016 elections -- in large part forcing the GOP to consider whether a strong conservative candidate is the party’s best pick to win a national election.