It was his second success on the European Tour this season after victory at the Ballantine's Championship in South Korea in March.
And it lifted him into sixth place in the Ryder Cup standings as Nick Dougherty slipped to 11th after missing his second cut in a row.
There was consolation for England's Simon Khan, who held a two-shot lead after 11 holes of the final round but double-bogeyed the 12th and 17th to finish fifth - he secured the final place on offer at this week's Open Championship at Royal Birkdale.
Khan admitted he was desperate to qualify for the Open with his wife coming from Liverpool and with grandparents living in Lytham and St Annes.
He held his nerve to par the last when a bogey would have handed the spot to Scotland's Stephen Gallacher, who closed with a superb 64 to tie sixth.
South African James Kingston was second, two off the pace, while Australia's Richard Green and Spain's Miguel Angel Jimenez were a shot further back in third.
"This is just unbelievable," McDowell, 28, said. "It really was a tough weekend's golf with such a stacked field. It's a massive relief. It's one of the toughest finishes in European golf and I don't think I've ever shook as much as I was coming down the stretch.
"I've never had a two-shot lead coming down the last hole and I much prefer it to the stress and drama I normally put my mum and dad through.
"My dad first put a club in my hand aged seven and he's been with me for 20 years, through thick and thin. He just retired last Friday. This is my retirement present to him."
Garry Houston, the Chester-based former M.E.N. Manchester Open winner, was 51st.
ANTHONY Stirling, from Harwood, won the Bolton Junior Championship at wind-swept Dunscar with a 75 and by two shots from the host club’s James Bolton.
The 16-year-old, nephew of Austria-based and former Great Lever professional Donald Stirling, is also on course for a place in the final of the Faldo Series after prevailing at Royal Liverpool last month.
MICHAEL Hunt homed in on the Antlers Trophy at Pleasington with a brace of 71s, level par all told, to claim his first victory of the season in the Mitsushiba Northern Order of Merit which he won four years ago.
The Lancashire County player had two shots to spare over Shaw Hill’s Sean Nicholls.
HOPWOOD’S Rachel Connor scored the only point, a half, as England lost to Sweden in the European Girls’ Team Championship at Murcar Links in Scotland
SWINTON Park assistant David Smith rolled in six birdies in a five-under-par 65 to win the PGA North Region Darlington pro-am by a shot from Newcastle’s Michael Archer.
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