With almost 98 percent of votes counted, Orban's Fidesz party has won 48.81 percent of the vote, the National Election Office (NVI) said, surpassing even the expectations of many within Fidesz.
The score represents an improvement on four years ago, and puts the 54-year-old premier on track for a third consecutive term in office -- and more possible clashes with Brussels.
Voter turnout had reached 69.26 percent, up more than seven points on elections in 2014, the NVI said, with several polling stations forced to open late to accommodate the increase.
Addressing flag-waving supporters in Budapest late on Sunday, Orban said the result gave Hungarians "the opportunity to defend themselves and to defend Hungary".
The crowd cheered as a giant TV screen showed electoral maps of the country almost completely covered in Fidesz's orange colour.
'No opposition here'
At end of his speech, Orban led the crowd in singing a song from the country's 1848 revolution, "Long Live Hungarian Freedom".
One supporter, 53-year-old Eva Halasz, said: "Viktor is the only leader for Hungary, this proves he has the nation behind him, there is no-one in this country like him, there is no opposition here."
Before the vote it had been thought that a surge in voter turnout would favour the opposition Jobbik, a far-right party that has been moving towards the centre, and the centre-left Socialists.
However, with nearly all votes counted, results show Jobbik trailing far behind with 19.67 percent, the Socialists on 12.42 percent and the environmentalist LMP party on 6.97 percent.
Jobbik's leader Gabor Vona resigned on Sunday night, as he had promised to do if Jobbik didn't win, and railed against the "lies" and "constant attacks" his party had had to face in the campaign.
It became clear on Sunday night Vona will struggle to win the seat he contested in his hometown of Gyoengyoes.
'Mass immigration rejected'
Orban will likely seize on the results as vindication of his clashes with EU institutions over his hardline anti-immigration policies and rejection of the EU's refugee resettlement programme, as well as his moves to clamp down on civil society groups.
An Orban victory will also provide a fillip for other nationalist politicians and those on the far-right around Europe who look to him as an inspiration.
In his speech Orban himself thanked Jaroslaw Kaczynski, leader of Poland's governing PiS party, for his support.
Poland and Hungary see each other as key allies in their battles with EU institutions.
France's far-right leader Marine Le Pen tweeted her congratulations on Sunday night, saying the "reversal of values and mass immigration promoted by the EU has been rejected once again".
Dutch far-right leader Geert Wilders was also quick to welcome the "excellent result".
"These elections have proved that migration is indeed a winning card for Orban's Fidesz. In the current Hungarian context, migration prevails against all other issues, from corruption to healthcare," analyst Andras Biro-Nagy from the Policy Solutions think-tank told AFP.
In terms of what a third Fidesz term may hold, Biro-Nagy said "we should take seriously what Orban promised to his opponents [in a speech] on 15 March".
In that speech, Orban had said he would take unspecified "moral, political and legal" measures against his opponents after the vote, prompting fears of a crackdown on opposition.
Fidesz may even be on track to win its coveted two-thirds "supermajority" in parliament which would grant it wide powers to press ahead with controversial measures and change the constitution.
Some of the previous measures passed using this mechanism include those that have put Orban on a collision course with Brussels.
They include what critics call the erosion of media and judicial independence, as well as its crackdown on civil society organisations linked to liberal US billionaire George Soros.
Orban accuses Soros and the organisations he funds of promoting mass Muslim and African immigration into Europe in order to undermine its Christian identity.
The last few weeks of the campaign were marked by allegations of money laundering and corruption levelled at Orban's inner circle, often published in media owned by oligarch Lajos Simicska, an erstwhile Orban ally who fell out with him after Fidesz's 2014 election victory.
The opposition's campaign had focused on corruption and deteriorating public services, as well as the government's failure to stem a high level of emigration which has seen the country's population fall under the symbolic 10 million mark.
Definitive results will not be issued for several days, after ballots sent bysyria expatriate Hungarians and ethnic Hungarians in neighbouring countries are counted.