Stephen Gallacher fired a 9-under 63 to share third place with Gregory Havret (68) and Soren Hansen (69), the local favorite and overnight co-leader. The trio finished at 20-under-par 268.
Poulter, playing in the group ahead of Montgomerie, came to the par-5 closing holes with a two-shot lead and the length to reach both greens in two. At the 17th, Poulter came up short in a bunker but his ball plugged into the trap, right above the lip forcing Poulter to play the shot with one foot in the bunker and one foot out. He blasted out short of the green but chipped to four feet to save par.
Montgomerie's second went through the green onto the back fringe. He went right at it to try and hole the chip but his ball ran six feet past the hole. Montgomerie sank the birdie try to get within one shot of Poulter's lead.
Poulter looked to be in strong shape to make birdie at the 18th when his second shot fell just right of the green. Unfortunately for Poulter he chunked his chip and left himself with 25 feet for birdie. That putt fell short and left but he tapped in for par and went to the scorer's tent to watch Montgomerie finish.
Montgomerie found the right side of the fairway and watched Poulter make par. He needed birdie to force a playoff but his second shot sailed into the gallery on the right side. Montgomerie got lucky when the ball struck a spectator in the hand and fell in good lie. His pitch landed 15 feet from the hole but the putt never broke to the left and it was the second runner-up finish for the Scotsman.
'I'm delighted. It was tense sitting in the hunt there but it was all worthwhile,' said Poulter. 'I was waiting for someone to make a move and as long as I stuck to my game plan and kept making good swings, it would be interesting to see who's coming.
'I haven't played these last two holes very well the last few days, in fact I haven't played them well all week. I've played 16 holes as pure as pure can be. I was really enjoying that.'
The win was Poulter's second of 2003 as he won the Wales Open in late May. Sunday's victory was his fifth on the European Tour in his young career which began in 2000.
Poulter birdied the second hole and added another birdie at the par-5 seventh when he two-putted from long distance. That birdie tied Poulter in first with four other players but Poulter claimed first with another birdie at eight.
Montgomerie matched Poulter at 19-under par but dropped a stroke to par when his approach at nine landed in a patron's bag. Poulter wedged his approach to five feet to set up birdie at 11 and made it two in a row with a birdie at 12 to suddenly take a two-shot lead.
Montgomerie clawed back into the tournament with birdies at 12 and 13. He trailed Poulter by two until the par-5 closing holes where Montgomerie was unable to catch Poulter.
'Winning is nice but second isn't bad before I go to the PGA Championship,' said Montgomerie, who is still in search of his first major championship. 'I said that 22-under would win and I didn't quite get there. I had two bogeys today and that isn't good enough. I was given a chance by Ian over the closing holes but couldn't take it.'
Brian Davis carded a 68 on Sunday to take sixth place at 19-under-par 269, followed by David Gilford, who posted a final-round 70, to finish alone in seventh at minus-18.
Miguel Angel Jimenez (68), Marten Olander (67), Patrik Sjoland (70) and Steve Webster (65) shared eighth place at 17-under-par 271.