Mr Wickremesinghe has been serving as the caretaker president ever since former president Gotabaya Rajapaksa fled the country and emailed his resignation days later.
He secured 134 votes in the 225-member house, while his main rival, ruling party lawmaker Dullas Alahapperuma, got 82.
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Another candidate, Marxist leader Anura Dissanayake received just three votes, reported the Associated Press.
“I thank parliament for this honour,” said Mr Wickremesinghe, who has served as prime minister for a record six times. “Our country is facing massive challenges and we have to work on a new strategy to fulfill the aspirations of the people,” he said after winning the vote in parliament.
“We feel that Ranil Wickremesinghe is the only person with the experience, the know-how and the capacity to provide solutions to the economic crisis.”
As president, he is to complete Rajapaksa’s term which was scheduled to end in 2024.
The vote could lead to political turmoil in the south Asian island state reeling from its worst economic crisis in memory and Mr Wickremesinghe, 73, has faced anger from protesters who want him gone because of his handling of the economy.
The response has been muted so far.
“We’re shocked. He’s a person handling things in a very cunning way,” protester Damitha Abeyrathne told Reuters of Mr Wickremesinghe. “He will start controlling us in a different way. As protesters, we will start our struggle again.”
His reputation as a shrewd operator earned him the nickname “the fox”, with several counting it in his favour as they rely on him to help pull Sri Lanka out of the crisis.
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Also a lawyer, Mr Wickremesinghe unsuccessfully ran for the presidential post twice earlier. His victory in parliament on Wednesday came after he secured the backing of many within the main party, Sri Lanka Podujana Peramuna (SLPP), that is dominated by the Rajapaksa family.
Thousands of demonstrators took to the streets earlier this month to vent their fury at soaring inflation, shortages of fuel and other vital goods, regular power blackouts and what they see as corruption among the ruling elite.
While the focus of their ire was Mr Rajapaksa, a member of the country’s most powerful political dynasty before the crisis who fled the country for Singapore, they also demanded that Mr Wickremesinghe stand down – something he refused to do. He has been blamed by critics for stalling probes against the Rajapaksa family, including for accusations of human rights violations and corruption. Mr Wickremesinghe denies the allegations.
His refusal to relinquish the leadership of his party had led to the formation of the Samagi Jana Balawegaya (SJB) outfit, whose leader Sajith Premadasa was slated to compete for the top post alongside him.
But Mr Premadasa dropped out of the race on Tuesday as parliamentarians met to finalise nominees. He put his weight behind Mr Alahapperuma. It was however, not enough to sway the elected representatives against the caretaker president.
Despite being born into a prominent family of politicians and businessmen with large interests in the media, Mr Wickremesinghe has little support beyond wealthy urban voters.
Though this has not stopped him from repeatedly finding his way back to the premiership, on 9 July he announced he was willing to step down as prime minister after protesters swarmed into his personal residence.
Having been made the country’s youngest cabinet minister at the age of 29, the newly elected president is an economic liberal with experience in dealing with the IMF and has developed a relationship with the neighbouring state of India and China.
