Sunday's run-off election pitted leftist President da Silva against former Sao
Paulo governor Geraldo Alckmin.
Mr Lula garnered 60.1 percent, against Mr Alkmin's 39.9 percent of the valid votes, according to the provisional results issued by electoral authorities.
"President Luiz Inacio Lula da Silva has been re-elected," said Marco Aurelia de Mello, who heads Brazil's Superior Electoral Tribunal.
Jubilant crowds immediately took to the streets of Sao Paulo, Brazil's financial capital, cheering, honking horns and chanting "Lula, Lula."
A onetime shoeshine boy and former metal worker Mr Lula, 61, enjoys widespread popularity among impoverished Brazilians thanks to the government's flagship social program that hands out cash assistance to more than 11 million needy families.
The South American country's healthy, if slow-growing, economy, was also a strong asset for Lula, with inflation down, trade at a record high, a large chunk of public debt paid off ahead of time and foreign currency reserves twice what they were four years ago.
Mr Alckmin, 53, who was favoured by the business community, has blamed Mr Lula's government for disappointing economic growth of 2.3 percent last year, but has not called for any major policy changes, focusing instead on a series of scandals that led to the resignations of several of Mr Lula's ministers and top PT officials.
"We need the economy to grow at least as much as that of emerging countries," said Manuel Souza Lima, 55, after voting for Mr Alckmin in Sao Paulo's well-heeled Jardins neighborhood. "We need a government that puts an end to all those scandals," said Souza Lima, a transport company owner.
Claims of campaign wrongdoing were largely seen as costing Mr Lula an outright win in the first round of voting on October 1, when he fell 1.4 points short of the simple majority needed to avert a runoff against Mr Alckmin.
President Lula denied any prior knowledge of the alleged campaign dirty tricks and turned up the heat ahead of Sunday's run-off, playing on popular concern his rival would privatise the giant Petrobras energy company and other state assets.
President Lula smiled broadly after he cast his ballot in the industrial town of Sao Bernardo do Campo, where he was once a labour leader.
"Brazil will now become a much better country, more productive and more generous for its people," he told journalists.
A few dozen kilometres away, Mr Alckmin flashed the V-for-victory sign after voting in Sao Paulo, Brazil's largest and wealthiest city, which he governed from between 2002 and March this year.
Voters were also called to elect governors in 10 of Brazil's 27 states, where gubernatorial elections were not decided in the October 1 voting.