German lawmakers voted by 364 to 315, with nine abstentions, in favour of re-electing the 63-year-old.
Speaking after the vote, she told the Bundestag lower house of parliament: “I accept the vote.”
This will be her 13th year as Chancellor of Germany after she was first elected in 2005.
Mrs Merkel has faced an uphill struggle to save her career adrer she failed to form a government in Germany’s general election.
At around 11am (local time) Mrs Merkel will pick up her certificate of appointment from the German president Frank-Walter Steinmeier at the Bellevue Palace.
She will then return to the Bundestag where she will be sworn in by the Bundestag president Wolfgang Schäuble at around noon.
This will include an oath: “I swear that I will devote my strength to the good of the German people, augment its value, protect it from harm, uphold and defend the Basic Law and the law of the covenant, conscientiously fulfil my duties, and practice justice for everyone. So help me God. “
The oath, however, can also be done without reference to God.
Her husband Joachim Sauer and 89-year-old mother Herlind Kasner were among the well-wishers.
The re-election comes ahead of Mrs Merkel’s meeting with French President Emmanuel Macron in Paris on Friday, where the pair are likely to discuss the reform of the EU
With her future hanging in the balance, Mrs Merkel turned to her old allies, SPD, despite experiencing four painful years in a previous grand partnership.
After eighteen years of being at the helm of the Christian Democratic Union, Mrs Merkel is now on the brink of her last hurrah as she leads her governing party’s grand coalition with the SPD.
Additional reporting by Monika Pallenberg