Garcia beat England's Justin Rose on the first hole of a sudden-death playoff after the European Ryder Cup team-mates had fought an intense duel on an electrifying Sunday afternoon.
Garcia won his first major at his 74th attempt and became the third Spaniard to win the Masters after two-time champions Seve Ballesteros (1980, 1983), who would have been 60 today, and Jose Maria Olazabal (1994, 1999).
The pair traded shots -- and congratulations -- in a head-to-head battle to rival the best Augusta has seen and emulate the remarkable shootout between Henrik Stenson and Phil Mickelson in the British Open at Royal Troon in 2016.
The 37-year-old Garcia, who missed a six-foot putt to win on the final green in regulation, clinched victory with a birdie on the 18th green on the first playoff hole after Rose had driven into trees and made a bogey five.
As the ball toppled into the cup, Garcia sunk on his haunches and pumped both fists before embracing Rose with tears in his eyes.
"It's been such a long time coming," Garcia, who is getting married later this year, said during the presentation ceremony in the Butler Cabin. "I'm so happy."
On donning the famous green jacket on the anniversary of Ballesteros' birthday, Garcia added: "To join him and Jose Maria, my two idols in golf my whole life is something amazing.
"Jose sent me a text Wednesday night telling me how much he believed in me."
Rose, 36, the Olympic champion and winner of the 2013 US Open, was bidding to become the second consecutive Englishman to win after Danny Willett's triumph last year and the first European to win a US Open and a Masters in his career. Instead, he had to settle for a second runner-up spot in three years at the Masters.
"I'm disappointed. I'm really happy for Sergio, obviously I'd love to be wearing the green jacket but if it wasn't me I'm glad it's him," Rose told the BBC.
The pair finished nine under after 72 holes, three shots clear off South African Charl Schwartzel, the 2011 champion.
American Matt Kuchar, who made a hole-in-one on the short 16th, and Belgian debutant Thomas Pieters ended on five under.
Garcia's popular victory at Augusta came after an escape worthy of the swashbuckling Ballesteros.
Tied with Rose for the lead heading into the final round, Garcia surged three clear after five but was two behind after 11 in what had effectively become a two-horse race.
On the par-five 13th, he tried to cut off the dog leg and caught the trees, but was fortunate to find his ball and scrambled to make a crucial par to stay two back, which seemed to renergise his round.
He made another birdie on 14 and the roars that greeted his revival rocked the Georgia pines almost to their foundations when he eagled the 15th to draw level again.
Rose edged ahead with a birdie on the short 16th but made a mess of 17 and the pair were tied going up the last to set up the dramatic finale.
The win comes five years after a frustrated Garcia told Spanish reporters, "I'm not good enough to win a major," having crashed out of contention with a poor third round at Augusta.
His major career going into this event featured 22 top 10s, including four runner-up spots, notably to Tiger Woods at the 1999 US PGA when he was a fresh-faced 19-year-old.
Garcia's outgoing personality, including running up the fairway after playing a shot from behind a tree, suggested a great rivalry was in the offing with Woods.
But while the American went on to dominate the game and notch 14 major titles, Garcia struggled with his self-belief and developed, at times, a sulky, woe-is-me attitude on the golf course as opportunities slipped by, in contrast to his stellar Ryder Cup career.
He was notably burned by losing a playoff to Ireland's Padraig Harrington for the 2007 British Open at Carnoustie after having a putt to win on the final green. He lost again to Harrington in the 2008 US PGA and finished second behind the dominant Rory McIlroy at the 2014 British Open.
It was a case of third time unlucky for McIlroy at Augusta as he tries to become only the sixth player -- alongside Woods, Jack Nicklaus, Gary Player, Ben Hogan and Gene Sarazen -- to complete the career grand slam of all four major titles.
The Northern Irishman carded a three-under 69 to end three under, a fourth consecutive top 10 in the Masters.
"It's another top 10 but not quite what I'm looking for here," McIlroy told the BBC.
The 2015 champion Jordan Spieth, who suffered that infamous collapse to open the door for Danny Willett last year, struggled from the outset in the penultimate group with close friend Rickie Fowler.
The 23-year-old had already been reduced to an also-ran when he dumped his tee shot into the water on the treacherous 12th, just as he did 12 months ago, finishing one under with Fowler.