Initial results are expected after 12pm AEDT.
The race pits centrist Senator Rodrigo Paz against conservative former president Jorge "Tuto" Quiroga. Both candidates have pledged to strengthen diplomatic ties with Washington - strained since 2009 - and seek US-backed financial support to stabilise Bolivia's fragile economy.
The runoff between two pro-market candidates from privileged backgrounds signals an epochal shift for Bolivia, following two decades of dominance by the leftist Movement to Socialism party, founded by Evo Morales and once backed by the country's Indigenous majority.
Electoral observers from the Organisation of American States (OAS) said the vote proceeded normally on Sunday. The winner will take office on November 8.
For some voters the finalists echo the conservative governments of the 1990s, which championed privatisation and close relations with the United States. Morales, who took power in 2006 and was Bolivia's first Indigenous leader, pursued alliances with Cuba, Venezuela and Russia, and nationalised the oil and gas industry.
"This election marks a political turning point," said Glaeldys Gonzalez Calanche, analyst for the Southern Andes at International Crisis Group. Regardless of the outcome, "Bolivia is heading in a new direction," she said.
Quiroga has promised "radical change," including deep cuts to public spending and closing or privatising loss-making state-owned companies. Paz favours a more gradual approach, maintaining social programs for the poor while promoting private-sector growth.
Opinion polls show Quiroga with a narrow lead. A September Ipsos survey gave him 47 per cent support to Paz's 39 per cent, though Paz outperformed expectations in the August first round.
Paz in late September announced plans for an economic co-operation deal worth $US1.5 billion with US officials to ensure fuel supplies, while Quiroga is pushing for a $US12 billion international bailout backed by multilateral lenders.
Inflation has surged to 23 per cent since the start of the year, while fuel and US dollar shortages have crippled consumer demand. Natural gas exports - once Bolivia's economic engine - have plummeted, straining the boliviano currency and limiting fuel imports.
with AP
