For Nibali, an Italian with the Astana team, the title cemented his status in an elite group of current riders considered capable of winning Grand Tours, along with Alberto Contador, Chris Froome and Bradley Wiggins.
Nibali took the overall leader's pink jersey after the seventh stage, never gave it up, and padded his lead by winning the final two mountain stages in dominating fashion.
Wearing entirely pink, Nibali was celebrated by fans throughout the mostly ceremonial final stage.
"It was a really unique emotion hearing all the fans cheering for me," Nibali said. "I really enjoyed this stage. It was unbelievable seeing all those people along the road. This victory crowns a life's dream."
Rigoberto Uran of Colombia finished second overall and Cadel Evans of Australia, the 2011 Tour de France winner, was third, 4:43 and 5:52 behind Nibali, respectively.
Evans said from the start that he was using the Giro to prepare for the Tour.
"Like I said from the first day, I came here to recover the days of racing I lost last year to illness and to get back to my best," Evans said. "Not looking at results, but in terms of objectives to work for, it was really successful. To be on the podium for what was, in some ways, just a training ride, is something."
It was Cavendish's 15th win in his Giro career and 41st in cycling's three Grand Tours — the Giro, Tour de France and Spanish Vuelta. He has a career total of 102 victories.
"I've always just wanted to win," Cavendish said. "I've been addicted to it since I was a child. Just wanting to win brings the best out of everyone. Especially when you have a team built around you, you have to deliver 100 per cent. That's what I try to do. If someone comes along who is faster, I'll go home, work harder, and come back faster the next year. It's as simple as this."
The British rider with the Omega Pharma-Quick Step team clocked 5 hours, 30 minutes, 8 seconds over the 206-kilometre (128-mile) leg from Riese Pio X to Brescia. The stage route was altered slightly due to avoid passing through a few towns where local elections were being held.
Italians Sacha Modolo and Elia Viviani finished second and third in the stage, respectively, with the same time as Cavendish.
The end of the stage was held entirely in Brescia, over a 4.2-kilometre (2.6-mile) circuit that was completed seven times. Part of the circuit took riders over cobblestones.
While much of the three-week race was characterized by wet and cold weather, including hard rain and even a snow blizzard in the penultimate stage Saturday, the final leg was held under clear skies.
Cavendish also secured the red points jersey by winning an intermediate sprint with 16 kilometres (10 miles) to go. It's the first time he has won the points jersey at the Giro, adding it to his jerseys from the 2010 Vuelta and the 2011 Tour.
"I'm lucky, the peloton is full of gentlemen that were content to let me fight for the punch (red jersey)," Cavendish said. "Nibali could have fought for it, but he was content to go for the maglia rosa (pink jersey)."
After Cavendish's sprint, Nibali rode across the finish with his arms raised.
While Nibali is not planning to ride the Tour this year, he could attempt to win the Vuelta in August and September, and perhaps go for the world title in Florence, also in September.
It was his second Grand Tour victory, having also won the 2010 Vuelta. He finished third in last year's Tour behind the Team Sky duo of Wiggins and Froome.
Wiggins began the Giro as one of the pre-race favourites but the British rider withdrew before the 13th stage due to a chest infection. Defending champion Ryder Hesjedal also pulled out at the same stage, citing a "deteriorating physical condition."
A 28-year-old from Messina, Sicily, Nibali (prounounced NEE-ba-lee) is nicknamed the "Shark of the Strait," after the Straight of Messina.
Giuseppe Martinelli, Nibali's team director at Astana, has now guided six different riders to a total of seven Grand Tour wins. His other wins came with Marco Pantani (who had two), Stefano Garzelli, Gilberto Simoni, Damiano Cunego and Alberto Contador.
Nibali has twice finished on the Giro podium previously, placing third in 2010 and second in 2011 after Contador was stripped of victory for doping.