The 34-year-old Finn celebrated his 300th European event and fourth tour victory after an overall 13-under 271 on the Fota Island course.
Italy's Edoardo Molinari shot a 4-under 67 to finish second on 12 under, a shot ahead of the England pair of Danny Willett (71) and Matthew Baldwin (69) who shared third place with Swede Kristoffer Broberg (69).
Molinari, Willett and Baldwin secured the three spots available for next month's British Open at Royal Liverpool.
Local favorite Graeme McDowell never really appeared in the hunt for his first Irish Open success, posting 71 to finish tied for sixth, three shots behind Ilonen.
Ilonen, who set a new course record with a round of 64 on day one, survived an anxious moment at the end of the final round when he found trees with his tee shot that led to a bogey.
''It's a very humbling moment to look at these names,'' said Ilonen, who becomes the first Finnish-born player to break into the top 50.
Victory also lifted Ilonen up 17 places to 11th on the Race to Dubai.
Former U.S. Amateur champion Matthew Fitzpatrick of England earned his first pay check with a share of 29th at 5 under.
''My first goal was to play all four rounds and I managed to achieve that despite a poor first round and I'm feeling very happy now,'' Fitzpatrick said.