The president will depend on the Centrao, a bloc of centre-right parties that typically backs governments in exchange for political concessions and access to public resources.
Lula has won another term, but his ability to govern will depend on whether he can bridge Brazil's political divide and deliver on voters' concerns.
Rising fuel prices and inflation have squeezed household budgets, while the government faces pressure to balance public spending with its commitment to welfare programmes.
Accused by his opponents of being too soft on crime, Lula will face pressure to tackle criminal groups and militias that control territory in several cities.
He noted economic indicators during Lula's first term had been relatively positive, with Brazil close to full employment.
Lula is set to govern without a majority in Congress.
And Bolsonaro is not going to accept having lost the election,” she told.
Lula campaigned on defending Brazilian sovereignty in the face of US pressure.