Election officials said Rajapakse had won over 60 per cent of the popular vote with just over a million ballots from Tuesday's election counted. Nearly 9.85 million people voted in all.
The first results showed Rajapakse getting 723,362 votes against 460,725 for Fonseka, according to official results.
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Officials said they estimated about 70 per cent of the electorate of 14.08 million turned out.
Support from civil servants
Sri Lanka's President Mahinda Rajapakse won strong backing from the country's civil servants in the presidential election on Tuesday, according to the first counts of postal votes.
Election officials said counting of ballots from Tuesday's bitterly contested election was under way and they hoped to release results throughout the morning on Wednesday.
The first results to be announced were of postal ballots, the votes cast by mail by public servants deployed for the election in which Rajapakse's main challenger was his former army chief Sarath Fonseka.
In the districts of Ratnapura, Puttalam and Moneragala, Rajapakse polled 23,317 votes while Fonseka picked up 10,402, official results showed.
Officials said they estimated about 75 percent of the 14.08 million electorate turned out to vote at an election the opposition said was by and large fair and peaceful.
Election result likely to be contested
Sri Lanka's government said it would contest the legitimacy of the main opposition candidate in Tuesday's presidential vote, setting up a clash that threatens new instability on the war-torn island.
Sarath Fonseka, a retired army chief, took on his former boss, incumbent Mahinda Rajapakse, in the election after a bitter and personal campaign that saw both sides accuse the other of planning foul play.
Just before polls closed after a day of voting that saw violence in the north of the country, Fonseka announced he had been unable to cast a ballot because he was not registered on the electoral list.
The government said this made him ineligible to be president, despite a strong statement from the independent election commissioner saying the issue did not prevent the 59-year-old military man from taking office if he won.
"We are seeking a court order on the suitability of this candidate because he is not eligible to be declared as a candidate," Foreign Minister Rohitha Bogollagama told reporters.
He said the statement from Election Commissioner Dayananda Dissanayake was a mere "opinion" that would be challenged in the Supreme Court.
The winner was set to be announced around midday on Wednesday. The first inconclusive results from the counting of postal votes in some parts of the country began to trickle out late Tuesday.
US commends voting turnout
The United States commended Sri Lanka on the high turnout in its first post-war presidential election amid a brewing dispute over the opposition candidate's legitimacy.
"We commend the people of Sri Lanka for a 72-percent turnout. That is something that is truly remarkable," State Department spokesman Philip Crowley told reporters.
