Bhandari took nearly two-thirds of the vote to retain her position as ceremonial head of state, the election commission confirmed.
Bhandari, who was backed by the ruling Communist bloc, was widely expected to defeat her sole opponent.
Her first five years in office have been largely uncontroversial.
Critics say she has not done enough to advance women's rights in deeply patriarchal Nepal -- though her role is largely ceremonial.
Late last year she signed into law a revamp of the country's ancient penal code, which criminalises the dowry system and bans an old Hindu practice that banishes woman from the home while menstruating.
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The 56-year-old took up politics in her teens, joining the fight to overturn the monarchy's centuries-long rule and later marrying a fellow communist, Madan Bhandari.
It was after her husband's death in a mysterious car accident in 1993 that the mother of two became a prominent voice, riding a wave of sympathy to win a seat in parliament.
As Nepal's political map was being redrawn after the end of the brutal Maoist insurgency in 2006 and overthrow of the king two years later, Bhandari campaigned hard to bring woman's voices to parliament.
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She was first elected president in 2015, shortly after Nepal's post-war constitution was passed, which carves out one-third of seats in parliament for woman and mandates that either the president or vice president must be a woman.
Bhandari is not the only woman at the top of Nepal's government. House speaker Onsari Gharti Magar has presided over the often raucous parliament with an iron fist since 2015, the first woman to hold the position.
Meanwhile, Sushila Karki served as the country's first female chief justice until her retirement in 2017, shocking her political backers when she took a tough stance on Nepal's endemic corruption.
Bhandari is a close ally of the ruling Communist bloc that has a strong majority in parliament as well as six of the seven provincial assemblies.
The Communists rode to a thumping victory late last year in local, provincial and national elections that capped Nepal's tumultuous 11 year transition from monarchy to federal democracy.
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