Giorgi Margvelashvili, a little-known academic from Ivanishvili's Georgian Dream coalition, won around 62 per cent of the vote in the poll yesterday, the election commission said after ballots from more than 97 per cent of polling stations had been counted.
His nearest challenger, ex-parliament speaker David Bakradze from Saakashvili's United National Movement (UNM) party, trailed behind on just under 22 percent, official results showed.
Margvelashvili had already claimed victory before cheering supporters at a rally in Tbilisi yesterday.
Basking in the win, Georgia's richest man Ivanishvili -- who wrested power from Saakashvili's party in parliamentary polls last year in Georgia's first smooth transfer of power -- said that he had been certain of victory.
"All together we will build a Georgia which we dream about," Ivanishvili said. "I congratulate you all."
Yesterday's vote marked the swan song of United States ally Saakashvili's second and last term and his bitter year-long cohabitation with his bete noire Ivanishvili, who has promised to also step down.
"The Georgian voters have expressed their will. I want to tell those who are not happy with the results: we must respect the majority's opinion," Saakashvili said.
Margvelashvili will assume a weaker role than Saakashvili because constitutional changes will see the prime minister take over many key powers from the president and become the dominant force.
Lower stakes this election saw a final turnout of just 46.6 per cent, according to official figures.
Ivanishvili has promised to name his replacement as premier and step down shortly after the polls, arguing that he has achieved his goals.
Ivanishvili has hinted his replacement will be a member of his cabinet but has so far kept mum about his or her identity.
