McGinley completed the event at 10-under-par 274. To go along with his fourth European Tour win, McGinley earned a five-year exemption on the European Tour.
'The size of this tournament is what means most to me,' McGinley said. 'I haven't won a really, really big tournament like this before. To win a big title like this means a lot to me.'
Montgomerie carded a double bogey, three birdies and four bogeys in a round of 3-over 74. He shared third place at 7-under-par 277 with Luke Donald (64) and Jose Maria Olazabal (69). Paul Broadhurst took sixth place at 6-under-par 278 after a closing 71.
Despite losing the lead, Montgomerie did manage to claim the European Tour Order of Merit for the eighth time. The only player that could have topped the Scotsman on the Order of Merit list was U.S. Open champion Michael Campbell. The New Zealander stumbled to a 1-over 72 to end in 14th place at minus-3.
'I had my own Volvo Masters to win, if you like, and I did that. I'm very, very happy,' said Montgomerie. 'It's never safe around this course. I lost six shots of the lead in the last five holes Saturday and I knew it was never going to be easy or safe.'
Garcia grabbed the outright lead with a birdie at the first. He gave that shot right back on the second, but led after three holes as Monty bogeyed three. McGinley, playing one group ahead of Montgomerie and Garcia, birdied the fourth to move to 7 under.
The big swing atop the leaderboard started at the fifth. Montgomerie moved to 10 under with a birdie on five. Garcia's second at the fifth flew the green and he was unable to save par to fall one back. Garcia went bunker to bunker on the sixth and ended with a double bogey that saw him fall to 7 under.
McGinley was playing steady golf after his birdie on four. He parred his next two holes before sinking a birdie putt at the seventh.
Montgomerie missed the fairway right at the seventh. His second shot hit more trees and he finally reached the collar of the green with his fourth. A two-putt from there for double bogey dropped him into a tie for the lead at 8-under.
Garcia birdied No. 8 to make it a three-way tie for the lead, which would be McGinley's after 10 holes.
Montgomerie, a two-time winner of this event, bogeyed the ninth and 10th after missing both greens to drop to minus-6. Garcia also bogeyed the 10th after his approach shot hit a tree and came up short of the putting surface. That dropped him to 7 under.
Meanwhile, the steady McGinley parred Nos. 8 and 9. He took the outright lead on the 10th after his second shot stopped within 2 feet of the cup. He kicked in the birdie to get to minus-9, and he would not lose that lead.
'I knew I had a chance today,' said McGinley. 'I knew Monty had gotten off to a good start every day and I thought if he gets off to a moderate start, and I make a couple birdies, I could close the gap quickly. Fortunately, that's the way it worked out.'
The Irishman three-putted for par on the par-5 11th. McGinley carded a series of routine two-putt pars over the next five holes, then drained an 8-foot birdie on the difficult par-5 17th to seal the win.
'I was extremely focused down the stretch,' McGinley said. 'I have made mistakes in the past and I've learned the very hard way from them. I just remained really focused the last few holes.'
Montgomerie tried to get back into the fray with birdies on 11 and 14, but he was side-tracked by a bogey on 15. Garcia had a chance to catch McGinley, but he could only birdie the 17th to reach minus-8. Needing to hole his second shot on 18 to force a playoff, Garcia's approach from the left rough came up well short of the pin.
Niclas Fasth, Simon Khan and 1997 winner Lee Westwood shared seventh place at 5-under-par 279. Ian Poulter, the 2004 champion, was one stroke further back at minus-4 and was joined there by Stephen Dodd, Kenneth Ferrie and 2001 champion Padraig Harrington.