'To come down here, feeling the way I do, I feel as though I'm starting out in some new career here,' said Montgomerie, who came from five strokes back on the final day in his first tournament since December. 'It's great to start off the year with a win.'
Green vaulted into contention earlier in the afternoon with a hole-in-one at the 12th worth $500,000 (Australian). He parred each of the last four holes on the way home for a 71 and second place at minus-nine.
Brett Rumford, who led at 12-under after shooting a course-record 64 in the third round, closed with a disappointing 76 to tie for third with Rodney Pampling (70) and Peter O'Malley (71) at eight-under par.
Montgomerie, one-under for the day at the turn, recorded an eagle at the par-five 10th to get to 10-under. He added a birdie at the 11th for the outright lead at 11-under, but dropped a shot three holes later to fall back into a tie for the top spot with Green and Rumford.
Montgomerie parred his remaining four holes and took the lead into the clubhouse, as Green and Rumford had both suffered bogeys at the 14th to drop to nine-under.
Rumford tumbled from his early perch at the top of the leaderboard with a bogey at the second, then dropped two more shots when par putts lipped out at the fourth and sixth holes. He was able to join the tie for the lead at 10-under with a birdie at the seventh, but six straight pars followed by the bogey at 14 left him one behind Montgomerie with four holes to play.
After registering pars at 15 and 16, Rumford hit a six-iron approach to 12 feet at the 17th but missed to the right with his birdie attempt. He had one last chance to force a playoff with a birdie at 18, but was long with his approach. Rumford took a shot at holing his chip but wound up two-putting for a final bogey that knocked him out of a share of second.
1997 Australian Masters champ Peter Lonard (73) and amateur Michael Cocking (73) tied for sixth place at seven-under, while David Podlich (69), Adam Scott (73), Jim Benepe (75) and Anthony Painter (75) rounded out the top-10 at minus-six.
Nineteen-year-old Aaron Baddeley, the winner of last week's Greg Norman Holden International, was among a group of seven players to finish at five-under par.
Click here for Full-Field scores from the Ericsson Masters!