The victory marks a stunning turnaround for the charismatic but tarnished leftist heavyweight, who left office in 2010 as the most popular president in Brazilian history, fell into disgrace when he was imprisoned for 18 months on controversial, since-quashed corruption charges, and now returns for an unprecedented third term at age 77.
All eyes will now be on how Bolsonaro and his supporters react to the result after months of alleging -- without evidence -- that Brazil's electronic voting system is plagued by fraud and that the courts, media and other institutions had conspired against his far-right movement.
"This country needs peace and unity," Lula said to loud cheers in a victory speech in Sao Paulo.
"The challenge is immense," he said of the job ahead, citing a hunger crisis, the economy, bitter political division, and deforestation in the Amazon.
He later addressed a tightly packed crowd of hundreds of thousands of supporters who flooded the city centre clad in Workers' Party red, vowing: "democracy is back."
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