DON'T MISS: Live blog
| Live results map | Watch ABC News 24 | Poll closing times | Election guide | Twitter dashboard |
Battleground states up close |
Have your say
ABC on YouTube
Keep up to date with the ABC's coverage of the election (All times AEDT)
Based on preliminary results, major US networks including Fox News, NBC and CBS have given Mr Obama more than the 303 electoral votes needed to secure victory in the presidential election.
He has also passed the magical 50 per cent mark in the nationwide vote.
With 86 per cent of all votes counted, the President leads Mitt Romney 50 to 49 per cent - 55,248,913 votes to 54,095,192 - for an overall lead of 1,153,721.
Celebrations have broken out among Democrats across the United States, including the Obama headquarters in Chicago, where people were cheering, waving flags, and jumping with joy.
During his victory speech, Mr Obama acknowledged that democracy was a messy process but has called on all Americans to unite in the face of hardship.
"By itself, the recognition we have common hopes and dreams won't end the gridlock or solve all our problems or substitute for the painstaking work of building consensus and making the difficult compromises needed to move this country forward," he said.
"That common bond is where we must begin."
Mr Obama also invoked the spirit of unity against the backdrop of America's diversity.
"The idea that if you are willing to work hard, it doesn't matter who you are, or where you come from, or what you look like, or where you live - it doesn't matter whether you are black or white or Hispanic or Asian or Native American or young or old or rich or poor, abled, disabled, gay or straight - you can make it here in America if you are willing to try."
"We are greater than the sum of our individual ambitions and we remain more than a collection of red states and blue states.
"We are, and forever will be, the United States of America."
The Republican candidate, Mitt Romney, officially conceded defeat, with a phone call to Barack Obama.
During his concession speech in Boston, he congratulated the President and said he prayed that Mr Obama will be successful in guiding the nation at a time of great challenges.
"USA is at a critical point, and this time we can't risk bi-partisan bickering," he said.
"Our leaders have to reach across the aisle to do the people's work.
"We look to Democrats and Republicans ... to put the people before the politics.
"I believe in America, I believe in the people of America."
Mr Romney also used his speech to pay tribute to his running mate Paul Ryan and his campaign team.
"Paul and I have left everything on the field, we have given our all to the campaign," he said.
President Obama has defeated his Republican challenger Mitt Romney in key swing states, including Ohio, which accounts for 18 electoral votes.
Mr Obama has also scored narrow wins in Iowa, Pennsylvania, New Hampshire and Wisconsin, the home state of Mr Romney's running mate, Paul Ryan.
Meanwhile, Mr Romney has captured only one swing state, North Carolina.
The result in the southern swing state of Florida, where Mr Obama won narrowly in 2008, is too close to call.
Tough road ahead
Despite the victory, President Obama is likely to face an equally divided Congress that was evident in the past four years, with the Republicans maintaining control of the House of Representatives and the Democrats retaining their majority in the Senate
In the House of Representatives, the Democrats failed to capture an extra 25 seats to change the balance of power.
The United States faces a so called "fiscal cliff" with a dangerous combination of expiring tax breaks and federal spending cuts looming.
The Republican speaker John Boehner said retaining the House of Representatives showed that American voters made it clear that there is no mandate for raising taxes.
However, he pledged to work with all members in Congress to achieve a fiscal breakthrough.
For more updates, visit ABC's live blog.