Francesco Rutelli, leader of the governing centre-left Olive Tree coalition and a former Rome mayor, on Monday conceded defeat.
Francesco Rutelli, leader of the governing centre-left Olive Tree coalition and a former Rome mayor, on Monday conceded defeat.
In a televised address, Mr Berlusconi, a billionaire businessman, pledged to strengthen ties with the European Union and the United States.
"We are proud to be part of the European Union and to have a special relationship with the United States. We will work to reinforce those ties," he said.
Poll chaos
He also pledged that his government would stay in power for its full five-year term. Italy has had 58 governments since World War II.
The results also pointed to a comfortable margin for the centre-right bloc in the lower house.
Some results took hours longer than expected to come in, as the vote was marred by chaotic scenes late into the night. Some voters tore up their ballot slips because of long queues at polling booths.
It is likely that Mr Berlusconi will have to rely on his more radical right-wing ally - Umberto Bossi of the anti-immigrant Northern League - to stay in power.
Mr Berlusconi wanted to avoid that, since it was Mr Bossi's decision to withdraw support which brought down the billionaire tycoon's previous short-lived government seven years ago.
Mr Berlusconi's alliance with far-right parties has caused some concern among Italy's European Union allies.
Criticism
There has also been criticism over his vast business interests and numerous criminal charges brought against him, including tax fraud, bribery and illegal party funding, which he denies.
Final results for the 324-seat Senate gave Mr Berlusconi's coalition 177 seats to the 125 won by Mr Rutelli's bloc.
In the 630-seat lower house, preliminary results gave the centre-right bloc 273 and the centre-left coalition 177.
Italian prime ministers need the support of both houses of parliament to have a good chance of survival.
The widespread chaos on election night sparked a row over the decision to reduce the number of polling stations from 90,000 to 60,000 - an apparent cost-cutting exercise.
Election officials kept voting booths open for several hours after the official closing time, to allow long queues of people to cast their ballots.
The election followed the most bad-tempered campaign in recent Italian history.
Campaign rhetoric
At his final election rally, 64-year-old Mr Berlusconi accused his opponents of "lies and mudslinging".
They sought to highlight the court cases that have dogged Mr Berlusconi in recent years. None of the charges have stuck.
In an unusual twist, leading European publication The Economist weighed in, describing Mr Berlusconi as "unfit to govern".
The election was seen as almost a referendum on Mr Berlusconi's personality and character.
His critics are alarmed that victory will grant him effective control of state-run television, to add to the three private TV channels and other media outlets he owns.
The main political issues of the campaign were pensions, immigration and promises of tax cuts.
Northern League vote slumps
Mr Berlusconi has had to juggle the demands of the five parties in his coalition.
One of the parties - Mr Bossi's Northern League - fared much worse than expected. Its vote is reported to have been slashed by half compared with the 1994 election results.
The complexities of voting are further added to by a voting system in which 75% of the seats in parliament's two chambers are awarded on a first-past-the-post system. The remaining 25% are allocated proportionally.