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Turkey's largest opposition party, the Republican People's Party (CHP), initially won a narrow victory over the ruling Justice and Development Party (AKP) for the mayorship of Istanbul in March, but the election was later cancelled over alleged irregularities at the ballot boxes.

A re-run on Sunday earned opposition candidate Ekrem Imamoglu a landslide victory with a significantly larger margin - more than 800,000 votes higher than AKP candidate and former Prime Minister Binali Yildirim.

Speaking to AKP legislators in Parliament, Erdogan on Tuesday congratulated Imamoglu. He had previously done so in a tweet.

"In line with our political understanding, we cannot be angry or hold a grudge or blame the people," Erdogan told his party's legislators. 

"We don't have the luxury of turning a deaf ear and ignoring the messages given by the people," he said.

Sunday's results were a rare electoral defeat for Erdogan, breaking the AKP and its predecessor’s decades-old grip on Turkey’s largest and most important city.

Many see the loss as a personal blow to Erdogan, who began his career with his own election as Istanbul mayor 25 years ago.

Analysts also say that the party's power has largely been derived from its hold on major municipalities throughout Turkey.

The AKP, Erdogan said, would determine its "failings, disunity and errors" and look for ways to fix them, adding that he had not ruled out a cabinet reshuffle.

"If one is needed we will do it, but we won't take an order," the president said.

The president also marked the anniversary of the electoral win last year that ushered him in as Turkey’s first executive president.

The new political system, which abolished the role of prime minister and greatly expanded the powers of the president, was narrowly approved by voters in a 2017 referendum.

Erdogan said the country had “accepted” and “adjusted” to the new system, which critics say has led Turkey further down the path to one-man rule, but that a committee lead by Vice President Fuat Oktay would be formed to assess any shortcomings.

Hours later, CHP Kemal Kilicdaroglu called for the presidential system to be scrapped.

"Let's lift this one-man regime and build a democratic system," Kilicdaroglu said in a speech in Parliament.