Iranian President Hassan Rouhani was re-elected to a second term by a landslide, the Interior Minister declared yesterday, presenting him with a resounding endorsement of his plans to end Iran's pariah status and rejoin the global economy.

With 57 per cent of the vote, Rouhani defeated his hardline rival, Ebrahim Raisi, who had the backing of the ruling clergy and allied security forces. He also won a clear mandate to push through domestic reforms and pursue talks with the West, building on the nuclear deal he negotiated with world powers.

That agreement, which Rouhani and his Cabinet clinched during his first term, constrains Iran's nuclear programme in exchange for international sanctions relief.

"The landslide victory gives Rouhani a mandate he did not have during his first term," said Cliff Kupchan, chairman of Eurasia Group, a political risk firm. "He'll remain a centrist," Kupchan said. But "will be more aggressive in pursuing reforms".

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Rouhani and his reformist backers also dealt a devastating blow to Iranian conservatives, most of which supported Raisi and scoff at the soft power of the incumbent leader's diplomacy.

Turnout reached roughly 70 per cent, with around 40 million Iranians casting ballots nationwide. At stake was whether Iran would continue to open up to the world or return to the diplomatic and economic isolation of the past.

Raisi and his supporters appeared to favour policies associated with former president and populist firebrand, Mahmoud Ahmadinejad. It was under his leadership that the United Nations began sanctioning Iran for failing to halt its uranium enrichment programme.

But while Rouhani managed to remove sanctions, economic growth remains slow and unemployment high. Many Iranians still live in poverty, and Raisi, who currently heads Iran's largest religious endowment, seized on the discontent to appeal to the poor and run a populist campaign.

"Despite poor economic conditions, (Iranians) said no to populism and empty promises of government subsidies," said Reza Akbari, a researcher on Iranian politics at the Institute for War and Peace Reporting. "This is especially refreshing given the recent rising populist trends in Europe and the US. The Iranian system is far from fair and balanced. However, Iranians demonstrated their belief that the most effective path to reform is through the ballot box."