Mr Alexander was his party's shadow foreign secretary but was defeated in his Paisley and Renfrewshire South constituency by the Scottish National Party.
Early indications suggest Prime Minister David Cameron will have enough seats to command a Commons majority without the support of other parties.
It's predicted the Conservatives will win at least 325 MPs with Labour behind on 232.
In Scotland the SNP is expected to finish with more than 50% of the overall vote in a landslide which also ousted Labour shadow Scottish secretary Margaret Curran and Catholic MP and Scottish Labour leader Jim Murphy.
Premier's Political Editor, Martyn Eden, said: "There's a scenario here that the SNP will say, look a majority of Scots voted for the SNP and we have no say in government, it's time we left the United Kingdom."
SNP leader Nicola Sturgeon
celebrates election win
Douglas Alexander was swept aside by the SNP's Mhairi Black, a 20-year-old politics student at Glasgow University, with a 26.92% swing.
The Catholic MP Jim Murphy is now being urged to stand down as the leader of the party in Scotland.
Ian Davidson, who lost his Glasgow South West seat to the SNP, said Mr Murphy had to go.
He told the BBC: "He was elected as party leader on the basis that he was an MP. Only MPs and MSPs can stand for the leadership.
"Morally, as the man who has led us to the biggest ever disaster that Labour has suffered in Scotland ... of course he can't continue.
"The process of rebuilding the Labour Party has got to start with an examination of both personnel and ideas.
"And therefore Jim has got to do the honourable thing and resign. I'm sure once he has got time to reflect, he will do that."
But Mr Murphy said: "The Scottish Labour party has been around for more than a century. A hundred years from tonight we will still be around."
Labour's shadow chancellor Ed Balls has lost his seat after a close victory for the Conservatives.
Nick Clegg said it was "cruel and punishing" for Lib Dems
The Liberal Democrats suffered a humiliating night losing up to 47 seats including Steve Webb and fellow Christian Simon Hughes.
Elsewhere three former cabinet ministers - Energy Secretary Ed Davey, Business Secretary Vince Cable and Treasury Secretary Danny Alexander were all defeated.
But Christian Tim Farron held his Westmorland and Lonsdale seat and is now tipped to be the next Liberal Democrat leader after the resignation of Nick Clegg.
In Northern Ireland the Alliance Party lost its only Westminster seat with Christian Naomi Long beaten by the DUP.
UKIP, which was the only major party to launch a dedicated Christian manifesto, lost one of its seats.
Conservative defector Mark Reckless was forced out by the Tories retaking his seat, but fellow former Tory Douglas Carswell won in Clacton.
Nigel Farage has also resigned after he failed to pick up the Thanet South seat.
The pre-election polls had shown a neck and neck race and predicted a hung parliament.
Colin Bloom, the Chief Executive of the Conservative Christian Fellowship, told Premier's Inspirational Breakfast why he thought the polls had been wrong.
"The two things they can never get quite right - one is the people that won't say or don't know and there are those who are what we call 'shy Conservatives' - those people who just keep it to themselves."