The 51-year-old first African-American President was projected by television channel CNN as having won the second term with 274 electoral votes after exit polls gave him California in west coast which has 55 electoral votes.
It projected Romney as having secured 201 votes in an electoral college of 535 votes. The winner has to garner at least 270 votes.
Till California was called, Romney had a comfortable lead over the President with another crucial state Florida saw a tight race between the two with a slight edge for Obama. Florida has 29 electoral votes.
Moments after network predicted his victory, Obama went online to thank voters for giving him a second term. "This happened because of you. Thank you. Four more years," Obama tweeted on his official account.
As television networks projected that Obama was on the road to victory once again, his supporters flooded the campaign headquarters in Chicago, the hometown of the President.
Celebrations erupted as Democrats raised slogans and revealed in victory. Hundreds and thousands of supporters of Barack Obama across the country from his home town Chicago to Times Square in New York erupted in celebrations.
65-year-old Romney, a businessman, had gained momentum in particular after the first presidential debate in early October. Official results are yet to be declared and Romney is also yet to concede defeat.