The largest Local Group spiral galaxy, M31, has been completely imaged for the first time, obtaining a luminosity lower limit about 10^35^erg/s in the 0.2-4.5keV band. Our XMM-Newton EPIC survey combines archival observations along the major axis, from June 2000 to July 2004, with observations taken between June 2006 and February 2008 that cover the remainder of the D_25_ ellipse. The main goal of the paper is to study X-ray source populations of M31. An X-ray catalogue of 1897(*) sources was created with 914 detected for the first time. Source classification and identification were based on X-ray hardness ratios, spatial extent of the sources, and cross correlation with catalogues in the X-ray, optical, infrared and radio wavelengths. We also analysed the long-term variability of the X-ray sources and this variability allows us to distinguish between X-ray binaries and active galactic nuclei (AGN). Furthermore, supernova remnant classifications of previous studies that did not use long-term variability as a classification criterion could be validated. Including previous Chandra and ROSAT observations in the long-term variability study allowed us to detect additional transient or at least highly variable sources, which are good candidate X-ray binaries. (*) the final catalog of table5 icludes 1948 sources.