The leaders of Germany's conservative parties and Social Democrats (SPD) plan to sign their coalition government agreement on Monday, bringing an official end to almost half a year of political uncertainty.
Lawmakers in Berlin's glass-domed Reichstag voted 364-315 with nine abstentions for Merkel who was then to be formally appointed by President Frank-Walter Steinmeier before taking the oath of office at 1100 GMT.
Germany's parliament has elected Angela Merkel for her fourth term as chancellor, putting an end to almost six months of political drift in Europe's biggest economy.
Merkel will head a much-changed new Cabinet. Merkel said on Monday her new government's focus would be on integrating refugees as well as increasing state powers to extradite people who had no right of residence.
Merkel, wearing a white blazer, said "I accept the vote" and beamed happily as applause filled the Bundestag chamber, where her scientist husband Joachim Sauer and her 89-year-old mother Herlind Kasner were among the well-wishers.
She said that "we need Europe - a Europe that shares the same values and acts together, particularly toward the outside world, and we. will make our contribution". The Social Democrats agreed to join the government only after lengthy internal wrangling.
AÂ so-called grand coalition has ruled Germany since 2013, but when all three parties lost support in September's general election, the SPD initially said it would go into opposition and regroup.
Angela Merkel "optimistic" and eager to 'get to work very quickly'.