The Liquigas rider, winner in 2006, had another victory all but sealed and carefully negotiated the cobbled streets of Verona to ensure there were no late calamities on the final time trial of the three-week race.
"I'm so happy. It's been a really difficult Giro," Basso, 15th on the stage, told reporters.
Roared on by thousands of compatriots who lined the 15 kilometre route through the city of Romeo and Juliet, Basso reaffirmed his love for the world's second biggest stage race by unleashing a huge smile as he crossed the line.
The 32-year-old then entered Verona's Arena, one of the best preserved Roman amphitheatres in the world, to be greeted by even more screaming fans and his two small children.
There he went up a specially-constructed pink carpet to claim his pink winner's jersey and complete a cycling resurrection few other drug-haunted riders have managed.
Basso was banned for two years in 2007 for his involvement in Spain's Operacion Puerto doping scandal, the latest in a series to rock the troubled sport.
He said he had not actually doped but had intended to do so and acknowledged he should therefore receive a suspension.
A low-key return to the Giro last year may have lulled his rival's into a false sense of security and this year he seized his chance at the perfect moment having recovered from a crash and navigated the bad weather of a topsy-turvy Giro.
With top names Alberto Contador and Lance Armstring skipping the Giro to concentrate on July's Tour de France, Basso kept himself well-positioned before snatching the leader's jersey off unheralded Spaniard David Arroyo with two stages to go.
Some exceptional performances in the mountains meant he finished 1 minute 51 seconds in front of second-placed Arroyo of Caisse d'Epargne and 2:37 ahead of team mate Vincenzo Nibali overall.
Nibali's achievement is remarkable given he was a very late callup for the Giro after Liquigas rider Franco Pellizotti was withdrawn just before the race because of a doping probe.
Sweden's Gustav Larsson of Saxo Bank won the final time trial in 20:19 amid muggy skies in northern Italy.
