Hajime Meshiai finished alone in third place at 9-under-par 279. Lonnie Nielsen and Joe Inman were two shots further back at 7-under-par 281.
Sam Torrance joined Fred Gibson in a tie for sixth at 5-under-par 283 to round out the list of the seven players who earned full exemptions into all open co-sponsored events on the 2004 Champions Tour schedule.
McNulty, who picks up $45,000 for the win, took the lead with a third-round 69 on Thursday and played his first nine holes at even par on Friday at the TPC at Eagle Trace.
The 16-time European Tour champion caught fire on the back side and picked up four birdies down the stretch to secure the top honors.
'Nothing much happened for me on the front nine, but I hit quite a few quality shots coming in,' said McNulty. 'I'm happy this is over. I've always had a burning ambition to play in America and I'm delighted to be joining the Champions Tour next year.'
James, who held the lead after two rounds, collected a single birdie on the outward half. James, an 18-time winner on the European Tour and the captain of the European Ryder Cup team in 1999, added a birdie on the back nine for a round of 70 and an 11-under-par 277 total.
'Mark (McNulty) really played well this week, but I'm also proud of my play overall,' said James. 'I was pretty nervous going out today, but I hit some solid shots early on that calmed me down a bit. I then just put it on cruise control on the back nine. I look forward to playing the Champions Tour next year.'
Meshiai used a barrage of birdie to surge towards the top of the leaderboard. He ran off five birdies and a double bogey on the front side before finding trouble with back-to-back bogeys from the 11th.
The Japanese veteran responded with five birdies over his last six holes to complete a round of 66 and earn his card for 2004.
The following players received conditional status on the Champions Tour for 2004 based on their order of finish in the eighth through 15th spots - Mike Smith, Keith Fergus, Rafael Navarro, Bobby Lincoln, Jack Spradlin, Jay Overton, Mark Johnson and Terry Gale.