The two were tied at 16 under par as both had the closing hole at Golf Club St Leon-Rot. Immelman played in the penultimate group and drove his ball down the fairway. He knocked his approach to 10 feet and sank the birdie putt to go one ahead of Harrington.
Harrington took an iron off the tee and also found the short grass with his drive. He saw Immelman make birdie from the fairway so the Irishman took aim at the flag and hit it 9 feet past the hole.
Harrington needed to hole the birdie putt to force a playoff but his effort missed left and gave Immelman the victory.
'I just had a funny feeling I was going to somehow make a birdie,' said Immelman. 'I haven't hit that fairway all week so once I hit it in the fairway I knew with the wind, I could work something in there.
'Lucky enough, I got a great read off Higgy's (Joakim Haeggman) putt there. I hit just outside the left and it managed to go in.'
Immelman fired a 7-under 65 in Sunday's final round to come in at 17-under-par 271. Harrington managed a 6-under-par 66 for a minus-16 total but it was the 2003 winner's 18th runner-up finish on the European Tour.
'In six months time nobody will remember how close it was,' said Harrington. 'It's going to be another second place. That's the way it is. I thought I was doing well and was surprised to see that he was keeping pace with me and I obviously needed to make more birdies.'
Haeggman and Darren Clarke both posted rounds of 3-under 69 to share third place at 12-under-par 276. Order of Merit leader Ernie Els, David Howell and Soren Kjeldsen tied for fifth at minus-11. All three shot matching rounds of 6-under 66.
Harrington and Immelman trailed third-round leader Gregory Havret by a pair to start the round but both birdied the first and Havret bogeyed so the trio was knotted in first.
Immelman went two ahead with a birdie at the third and a Harrington bogey at the second, but the Irishman birdied the par-5 third to get within one of the lead.
Harrington matched Immelman in first with a 20-foot birdie putt at the seventh. Immelman went up again with a 25-footer for birdie at No. 9. Harrington answered in the group behind with his own birdie at the ninth and the duo were tied heading to the back nine.
Immelman sank a 10-foot birdie putt at the 11th for a momentary lead, but Harrington rolled home a 30-footer for birdie at the 10th. Immelman two-putted for birdie from 25 feet at the par-5 12th, but Harrington answered again. He had 9 feet for eagle at 12, but missed the putt and tapped in for a lead-tying birdie.
Harrington, who defeated Thomas Bjorn in a playoff last year, sat alone atop the leaderboard with a 15-foot birdie putt at 14. Immelman crawled into the tie for first with a 30-footer at 15 as both players had their share of problems at the par-5 17th.
Immelman drove into a fairway bunker on the right side and laid up well short of the green. He played his third to the back fringe and hit a poor putt, leaving him with 12 feet to save par. The South African cooly holed the putt to remain tied for the lead at minus-16.
Harrington landed in the fairway with his tee ball at 17 but hit a terrible second shot that came up in the rough on the left side. He hit his third to 22 feet and missed the birdie to keep his piece of the top spot.
Then came Immelman's heroics at 18, followed by Harrington's missed putt and it was Immelman who hoisted the trophy.
'I felt like I really scored well today,' said Immelman, who moved to third on the Order of Merit. 'Padraig is a top-10 player in the world. To hole that putt was awesome.'
The win was Immelman's second of the 2004 season and third on the European Tour. He captured the second event of the year, the South African Open, a tournament he also won in 2003.
Louis Oosthuizen finished eighth at 8-under-par 280, after an even-par 72 on Sunday. Second-round leader Alex Cejka shot a 72 in the final round and tied for ninth with 2001 U.S. Open champion Retief Goosen, who carded a 70. That duo tied at minus-7.
Havret played badly on Sunday. He posted a 10-over 82 and tied for 23rd place at 2-under-par 286.