If Balbina Herrera wins, she would be the country's second female president, following Mireya Moscoso, widow of former President Arnulfo Arias, who was elected in 1999.
Herrera, a 53-year-old former housing minister under current President Martin Torrijos, defeated Panama City Mayor Juan Carlos Navarro in the Democratic Revolutionary Party primary held Sunday.
While full results won't be ready for several days, party official Carlos Gonzalez said Monday that Herrera won with a 10 percent lead over Navarro. She will officially be named the candidate later this week at a party event in the capital.
Herrera promises to continue Panama's strong economic growth, with more professional and working-class jobs.
Early polls show Herrera running a close race with Ricardo Martinelli, who owns a chain of supermarkets. Martinelli, who founded the Democratic Change Party, is making his second run for the presidency.
Since a U.S. invasion ended Manuel Noriega's military dictatorship in 1989, only Herrrera's party and the Panamanian Party have won the presidency.
But the Panamanian Party candidate, Juan Carlos Varela, is running a distant third in recent polls. The 45-year-old comes from a family that produces Panama's most popular rums.
Torrijos, who earned an economics degree at Texas A&M University, was elected in 2004. He is the son of former strongman Omar Torrijos, who died in a 1981 plane crash.
Under Panama's law, presidents can only serve one term.
