Dissanayake, 55, who does not possess political lineage like some of his rivals in the presidential election, led from start to finish during the counting of votes, knocking out incumbent President Ranil Wickremesinghe and opposition leader Sajith Premadasa.
"We believe that we can turn this country around, we can build a stable government... and move forward. For me this is not a position, it is a responsibility," Dissanayake told reporters after his victory on Sunday which was confirmed after a second tally of votes.
Outgoing President Ranil Wickremesinghe conceded defeat after only winning 17 per cent of the vote. (AP PHOTO)
The election was a referendum on Wickremesinghe, who led the heavily indebted nation's fragile economic recovery from an economic meltdown but the austerity measures that were key to this recovery angered voters. He finished third with 17 per cent of the votes.
"Mr President, here I handover to you with much love, the dear child called Sri Lanka, whom we both love very dearly," Wickremesinghe, 75, said in a statement conceding defeat.
Dissanayake polled 5.6 million or 42.3 per cent of the votes, a massive boost to the three per cent he managed in the last presidential election in 2019. Premadasa was second at 32.8 per cent.
It was the first time in the Indian Ocean island's history that the presidential race was decided by a second tally of votes after the top two candidates failed to win the mandatory 50 per cent of votes to be declared winner.
About 75 per cent of Sri Lanka's 17 million eligible voters cast their ballots, authorities say. (AP PHOTO)
Under the electoral system, voters cast three preferential votes for their chosen candidates. If no candidate wins 50 per cent in the first count, a second tally determines the winner between the top two candidates, using the preferential votes cast.
About 75 per cent of the 17 million eligible voters cast their ballots, according to the election commission.
This was the country's first election since its economy buckled in 2022 under a severe foreign exchange shortage, leaving it unable to pay for imports of essentials including fuel, medicine and cooking gas. Protests forced then-President Gotabaya Rajapaksa to flee and later resign.
Dissanayake presented himself as the candidate of change for those reeling under austerity measures linked to a $US2.9 billion ($A4.3 billion) International Monetary Fund bailout, promising to dissolve parliament within 45 days of taking office for a fresh mandate for his policies in general elections.
Dissanayake has worried investors with a manifesto pledging to slash taxes, which could impact IMF fiscal targets, and a $US25 billion ($A37 billion) debt rework. But during campaigning, he took a more conciliatory approach, saying all changes would be undertaken in consultation with the IMF and that he was committed to ensuring repayment of debt.
Buttressed by the IMF deal, Sri Lanka's economy has managed a tentative recovery. It is expected to grow this year for the first time in three years and inflation has moderated to 0.5 per cent from a crisis peak of 70 per cent.
But the continued high cost of living was a critical issue for many voters as millions remain mired in poverty and many pinned hopes of a better future on the next leader.
Dissanayake ran as a candidate for the National People's Power alliance, which includes his Marxist-leaning Janatha Vimukthi Peremuna party.
