Three-down to Harrington late in the round, Woosnam took five holes in a seven-hole stretch to ultimately end the tournament on the 35th by a narrow 2-and-1 margin.
At 43 years of age, the small-of-stature Welshman became the tournaments oldest champion.
He also became a three-time winner of this event, having now taken titles in 1987, 1990 and 2001.
It has certainly been worth the wait and effort, said Woosnam, whose last official victory came at the 97 Volvo PGA Championship at this same Wentworth Club. 'I am really overjoyed.'
Woosnams play on Sunday mirrored that of his play all week ' it was nothing less than superb.
So too was Harringtons.
As he had done on several occasions this week, Woosnam opened in the strongest of forms, birdieing a record seven holes in a row over the front nine to gain a 3-up lead.
Harrington, however, was undaunted.
The Irishman responded by putting on a show of his own, carding an equally-impressive seven birdies over the back nine to finish the opening 18 2-up on merits of an approximate 61.
After a quick lunch, the action picked up on the second 18 just as it had left off.
Woosnam won the 19th hole to climb to 1-down, but then dropped two more back of Harrington, as the Irishman took the 20th and 21st with birdies.
Three-down entering the 25th (par-4 7th), Woosnam caught fire again, however.
He birdied six of his next seven holes (25th through the 31st) and gained five on Harrington, pulling ahead by two.
Harrington would never respond.
A string of four consecutive pars by each men saw the match conclude at the 35th, with Woosnam winning with just one to play.
I beat four great players this week,' said Woosnam, who knocked off Retief Goosen 4-and-3, Colin Montgomerie 4-and-3 and defending champion Lee Westwood 10-and-9.
'Obviously as you get older it is more difficult to win and after four years you dont know what is going to happen, but all I can say is that I played really well.
For the week, Harrington had also been dominating.
Like Woosnam, he trounced his opponents, beating Nick Faldo 9-and-8, Darren Clarke 5-and-4 and Sam Torrance 4-and-3.
As well as he played on Sunday, however, it just was was a little short. Unfortunately, it has been like this for the majority of his year ' in 18 European Tour events, he has now finished runner-up seven times.
Harrington was obviously shaken at match's end, and a sight for much sympathy.
I am totally and utterly disgusted,' he said. 'The ball was in my court. I was in control and it was totally my fault.'
Click Here for Scores from Sunday's Final Results at the Cisco World Match Play Championship.