In the first round, Peres fell three votes shy of the 61 needed to clinch the presidency.
Minutes after the balloting was announced, with Peres taking 58 votes to 37 for Likud challenger Reuven Rivlin and 21 for Labor MK Collette Avital, Avital called an impromptu news conference to announce that she had decided to pull out of the race and throw her support to Peres. Soon after, Rivlin followed suit.
Despite the octogenarian Peres' record as a Nobel laureate, former prime minister, protege of David Ben-Gurion and founder of Israel's nuclear program, much of his political legacy was still riding on the vote, following a string of electoral defeats going back decades.
The Peres victory followed an especially painful defeat seven years ago at the hands of then-Likud MK Moshe Katsav. On the eve of the vote, Peres was said to have been assured by no less than 66 lawmakers that they would vote for him. But when the votes were counted in a secret ballot, 63 MKs had voted for Katsav and only 57 for Peres.
Katsav, who now faces the possibility of rape and sexual assault charges, has suspended himself from presidential duties.
Rivlin, a former speaker of the Knesset who enjoys broad popularity in the house, was until recently seen as the clear favorite in the race. But a late surge by Peres, courting the endorsement of ultra-Orthodox spiritual leaders and other key figures, closed the gap.
Avital, who first came to public prominence as Israel's consul-general in New York, was the first woman to mount a serious challenge for the presidency.
Among Peres' challenges in winning the presidency was his defection from the Labor Party prior to elections last year, a move which cost him his traditional power base. Peres left the party following his 2005 defeat by Amir Peretz for the position of Labor chairman. Peres, now 84, joined the Kadima faction founded by then-prime minister Ariel Sharon.
The presidential race was made particularly tense by the position of the Labor faction as potential kingmaker. But when Labor's Avital endorsed Peres after the first round, his victory was all but guaranteed.
On the morning of the election, Maariv daily's front page was bordered by individual portraits of Peres detailing each one of his eight electoral defeats ranging back to the early 1970s.
In the early phase of the current campaign, Peres, maligned by the press as a serial loser, sought in vain to have the Knesset vote take place openly, and not by secret ballot.