MILWAUKEE (Reuters) - Democratic challenger Tom Barrett conceded Wisconsin's recall election to Republican Governor Scott Walker on Tuesday, saying he hoped the deeply divided state would now come together.

With 85 percent of the vote counted, Walker had about 55 percent of the ballots to 44 percent for Milwaukee Mayor Barrett.

"This has been the most amazing experience of our lives," Barrett told supporters. "What we have seen during the last sixteen months is this democracy come alive."

Barrett lost to Walker in the 2010 governor's election as well but will continue as mayor of Wisconsin's largest city, Milwaukee.

Walker is only the third governor in U.S. history to face a recall during his term in office. He angered Democrats and unions when he championed a law to severely restrict the collective bargaining of unionized state and local government workers. Walker said the changes were necessary to close a large state budget deficit.

The recall election has been seen as a barometer of the U.S. political climate going into the presidential election in November.

The vote was also viewed as a test of strength between organized labor and conservative opponents, both of whom have poured money and effort into the contest.

The election has broken all state records, with more than $60 million spent, including millions from so-called Super PACs which are third parties not directly tied to the candidates who have blanketed the airwaves in Wisconsin with advertising.

(Reporting by Brendan O'Brien; Writing by Andrew Stern; Editing by Greg McCune)