Khan had not fought in over a year since his unconvincing win over Julio Diaz on a rare return to Britain last April, and had controversially missed out on the main event on the card at the MGM Grand Garden Arena opposite Floyd Mayweather, who opted to battle Marcos Maidana instead.
But the time off and the Mayweather frustrations had a positive effect on 'King' Khan, who picked off the tough and dangerous Collazo from the opening bell.
In round four, Khan added a knockdown to his technical dominance, catching his opponent off-balance.
Though Collazo at times caused Khan trouble with some strong left hands, Khan kept the bout at his tempo and his range before devastating the American in the 10th with two more knockdowns.
Collazo was frustrated and made complaints about each, but replays showed he was caught both times by splendid power punches to the head and body and deservedly dropped the round 10-7.
Khan came closest to losing his focus in the final two rounds but did more than enough to see out the victory on all three judges' scorecards.
The Bolton boxer took the cards by 117-106 and 119-104 twice to stake his claim for a Mayweather opportunity down the line.
TWEET: "I knew it was going to be a war vs @RealLuisCollazo, but now it's over and I'm glad" @AmirKingKhan at post presser
And Khan reinforced his intentions after the win, saying: "People want to see me and Floyd fight. He keeps fighting strong but beatable fighters. No disrespect to Marcos Maidana but I beat him and he's the same opponent Floyd always takes on. Styles make fights.
On the time away from the ring, he said: "Training with Virgil Hunter has been for 12 months rather than eight weeks and he taught me a lot for this fight. The layoff was great.
"I needed that break from boxing but I stayed in the gym working and training hard."
Elsewhere on the undercard, Adrien Broner bounced back from his first professional defeat to Maidana by dominating Carlos Molina over 10 rounds at light-welterweight.
While Broner regained his confidence and looked more comfortable one weight class down, his performance was not of particular note and failed to win over the live crowd.
Worse, when he attempted to display some trademark arrogance in his post-fight interview, Broner only served to annoy both the crowd and the PPV network more by proclaiming "he beat the f*** out of a Mexican".
J'Leon Love recovered from a torrid fifth round to decision Marco Periban while two Brits were victorious on the preliminary card - Ashley Theophane stopped Angino Perez in four while London 2012 Olympian Anthony Ogogo needed just three to extend his pro record to 6-0 against Jonel Tapia.
- Sports & Recreation
- Floyd Mayweather
- Marcos Maidana