Results showed that Rajapakse's United People's Freedom Alliance swept 205 of the 234 councils that went to the polls Thursday, the first local election since the island's 37-year-long ethnic war ended in May 2009.
"The people's verdict has proved the fullest confidence they kept in the government," Rajapakse said in a statement.
"The people's verdict has endorsed our programme to develop this country."
Rajapakse has vowed to double the country's per capita income to over $4,000 within the next five years as the island recovers from the effects of the separatist war estimated to have claimed 100,000 lives.
The main opposition United National Party was crushed in Thursday's vote and was reduced to just nine councils.
The Tamil National Alliance, a party of minority Tamils, won 12 councils after fielding candidates in the island's former war zones.
The main minority Muslim party won four councils while the balance went to small regional groups.
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