Progress results delivered to Invercargill City Council just after midday today show Clark had 6537 votes, followed by NewstalkZB broadcaster Marcus Lush with 3785 votes.
Shadbolt tallied just 847 votes.
Invercargill City Council deputy electoral officer Michael Morris said with only 2104 ordinary votes and a number of special votes still to be counted, the result was clear.
"We are delighted to see yet another strong voter turnout from our passionate Invercargill community," Morris said.
"There were a large number of candidates for mayor and it was a tight race but our city has spoken and we are pleased to announce Nobby Clark will be our new mayor."
Morris said Invercargill and council would bid a fond farewell to Shadbolt.
"Sir Tim Shadbolt is New Zealand's longest-serving mayor," he said.
"His mayoralty spanned over 24 years and we know the Invercargill community has a strong affection and gratitude for his hard work and commitment to the role and the city over the past two decades."
Lush said he was "disappointed".
"I think I would have been good for the city," he said.
"I'm happy with the way I campaigned. It was a pretty interesting experience to be honest, it wasn't quite the result I hoped for but I'm certainly very pleased I gave the people of Invercargill a chance for a real positive direction for the city.
"That's very much what I was about... a bright new future for Invercargill... that's not what they've gone with."
When asked if he had any words for the new mayor-elect, he spoke instead about the outgoing leader.
"I'd like to acknowledge Sir Tim Shadbolt who is a beloved mayor down here and this is the end of the run for him," he said.
"I hope Invercargill will find a fantastic way to honour his legacy."