With results in from most states, America’s first black president has secured the 270 votes in the electoral college needed to win the race.
Mr Obama prevailed despite lingering dissatisfaction with the economy and a well-funded challenge by Mr Romney.
Mr Obama’s margin of victory is not yet certain because two states have yet to report results.
Mr Romney, the former governor of Massachusetts, has called the president to concede the race.
With Florida still too close to call, Mr Obama has won 303 electoral votes to Mr Romney’s 203.
In Boston, where his campaign was headquartered, Mr Romney congratulated the president in an emotional concession speech.
He said he and Vice-presidential candidate Paul Ryan had “left everything on the field” and had given their all in the campaign.
“This election is over, but I believe that our principles endure,” he said. “I so wish that I had been able to fulfil your hopes to lead the country in a different direction.”
The state of Alaska, where polls have yet to close, is expected to vote for the Republican.
Under the US constitution, each state is given a number of electoral votes in rough proportion to its population. The candidate who wins 270 electoral votes – by prevailing in the mostly winner-takes-all state contests – becomes president.
The popular vote, which is symbolically and politically important but not decisive in the race, remains too close to call.
On Tuesday, the president held the White House by assembling solid Democratic states and a number of important swing states such as Colorado, Iowa, Pennsylvania, Michigan, Minnesota, Virginia and Wisconsin. His narrow victory in Ohio, a critical Mid-Western swing state, sealed the victory.
Mr Romney won North Carolina and Indiana, both of which Mr Obama won in 2008, as well as the solid Republican states.
But he was unable to win in Ohio or other states needed to breach the 270 threshold.
Also on Tuesday’s ballot were 11 state governorships, a third of the seats in the 100-member US Senate and all 435 seats in the House of Representatives.
Republicans are projected to keep control of the House, while Democrats are tipped to remain in control in the Senate.
Mr Obama’s re-election victory came despite lingering high employment – 7.9% on election day – and tepid economic growth.
But voters gave him credit for his 2009 rescue of the US car industry, among other policy accomplishments, and rewarded him for ordering the commando mission that killed Osama Bin Laden in Pakistan last year.
He and Mr Romney, as well as their respective allies, have spent more than $2bn (£1.25bn) – largely on adverts in swing states.