Parvanov won 74.4 per cent of the vote in a second-round ballot, official results showed with 73.2 per cent counted on Sunday.
Far behind, with 25.6 per cent was Volen Siderov, leader of the nationalist Attack party, who diplomats and analysts said campaigned on an undemocratic, anti-minority platform not compatible with the EU.
"It's a historic victory," said Parvanov, pledging to secure "dignified EU membership that sustains national identity".
Despite the clear outcome, the election has exposed a patchy reform record under Parvanov and forced him to fend off criticism that he has failed to push governments to tackle high-level graft and organised crime.
The 49-year-old president won the first round with 64 per cent but turnout was below the 50 per cent needed for him to avoid a run-off for the mostly ceremonial post.
With limited powers such as vetoing laws and appointing cabinets, Parvanov casts himself as "president of all Bulgarians".
However, political analysts say his victory will help consolidate power for the Socialist-led coalition he helped create after a divisive 2005 general election.
He led the Socialists' conversion from an old-school communist party to a more European model and has won wide approval for improving Bulgaria's image on its path to Nato membership and its invitation to join the EU on January 1.
"I voted for Parvanov, because he can represent the country in front of Europe, not some nationalist," said student Katerina Arnaudova, 24. "It was a shame Siderov was a candidate at all."
However, voter frustration was high. The survey, taken an hour before polls closed at 7pm [1700 GMT], said turnout was about 35 per cent, below the 42.5 per cent seen in the first round on October 22.
Although economic growth is expected to reach 6 per cent this year, nominal average wages of 160 euros [$203] a month will be the EU's lowest, and the country has made little progress tackling rampant corruption and gangland crime.