The Alliance Part lodged a petition at the High Court in Belfast in June over the result of the Waterside DEA in May’s council election.
The SDLP’s Martin Reilly took the seat from Alliance’s Phillip McKinney by a narrow margin of 49 votes.
It is understood that after a recount today, Wednesday, August 9, Mr Reilly has kept his seat by around 10 votes.
The result will not be officially declared until the election court meets again next Thursday.
SDLP leader Colum Eastwood welcomed the result of the recount.
He said Mr Reilly’s election was testament to him working incredibly hard for people from every community.
In a statement, the Foyle MP said: ““I’m delighted for Martin today – he works incredibly hard for people from every community in the Waterside every day and that’s why they’ve chosen him to be their representative.
“He’s had a long wait but the result is a testament to his approach to fighting hard for every community in the long and proud tradition of the SDLP.
Councillor Martin Reilly said: “I’m delighted that the democratic process has now been fulfilled in the Waterside and I can continue to fight hard for everyone across our communities.
“I am immensely grateful to everyone who has supported me and will work hard over the next four years to repay their faith.
“I look forward to the formal certification of the result in court next week.”
Alliance had questioned why its candidate was eliminated when there were still about 150 votes left to be transferred.
It was alerted to the potential error in the Waterside DEA and the party subsequently lodged an election petition with the High Court in Belfast
The High Court ruled on Monday that the count should resume this week.
Counting got underway at 10 am in the Foyle Arena, starting at stage seven of the count.
Alliance lost its only two councillors on Derry City and Strabane District Council – Rachael Ferguson and Mr McKinney – in May’s.
The double loss came just weeks after the party opened a constitency office in Derry.
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