The Australian, already confirmed on pole position, was left needing only a top-six finish after the pre-race withdrawal of title rival Jorge Lorenzo, who suffered a serious finger injury when crashing in the warm-up.
And Stoner rode flawlessly to keep himself out in front, taking victory with Marco Simoncelli second and Andrea Dovizioso third.
It was Stoner's second MotoGP title - the first coming in 2007 - and came on his 26th birthday. The win represented Honda's first rider's title of the 800cc era.
Stoner led from start to finish, ensuring he kept out of trouble as an eventful race unfolded behind him.
Ducati's Nicky Hayden surged to second by the first corner but was soon overhauled by Gresini Honda's Simoncelli, factory Honda pair Dovizioso and Dani Pedrosa and Alvaro Bautista of Suzuki.
Valentino Rossi crashed out with 14 laps remaining on the other Ducati after a rash move to pass Bautista, but it was when rain arrived in the latter stages of the race that things were shaken up.
Simoncelli and Pedrosa both exercised far too much caution, allowing Dovizioso to pass the former for second place while the Spaniard was unable to make further headway from fourth.
Bautista, Cal Crutchlow, Hiroshi Aoyama and Karel Abraham all crashed out in the wet conditions as only 10 bikes finished the race.
Colin Edwards (Tech 3 Yamaha) was fifth of those, ahead of Pramac Ducati's Randy de Puniet, Hayden, Toni Elias (LCR Honda), De Puniet's team-mate Loris Capirossi - who, along with Hayden, switched to his wet bike - and Karel Abraham of Cardion AB Motoracing.
A delighted Stoner told autosport.com: "I don't think I can fit too many more things in today (Sunday). It's my second title, my fifth win [at Phillip Island] and my birthday too. Home grand prix... everything.
"To win like this is something special. I don't think people can align things to fit in like that.
"It's been a dream season really. We've had a few ups and downs, but the downs haven't been that far down and the ups have been a long way up, so a big thanks to the team and everyone that's done such an amazing job."
On the late rain, he added: "The race threw a few curve-balls in. Being in the lead, I was the one having to test all the conditions first, and you're never quite sure what's going to happen there.
"It wasn't the way I wanted to do the race. I hoped it would go a lot more smoothly, but we managed to bring it home for the win. Words can't describe how I'm feeling right now."
Stoner also helped his team clinch the constructors' title and Honda Racing president Tetsuo Suzuki said: "It is with great pride that I stand here on the day Honda takes its 60th constructors title.
"It is a credit to our dedicated team, who always strive to break boundaries and expand our engineering methods to create these wonderful bikes, and to our talented riders, without whom this feat would not have been possible.
"It has been five years since we won our last championship and I am honoured to see that HRC is back and stronger than ever."