Nibali, 29, joins an exclusive club of six riders to have won the Tour de France, Vuelta a Espana and Giro d'Italia.
Italian national champion Nibali, of the Astana team, finished comfortably in the peloton after Giant-Shimano's Kittel repeated his winning turn from last year on the famous cobbled street of the French capital.
Kittel powered past Norway's Alexander Kristoff (Katusha) and Lithuania's Ramunas Navardauskas (Garmin-Sharp) to post a record seventh win for Germany during this year's Tour.
A dramatic crash entering the Place de Concorde on the third of eight laps on the Champs-Élysées provided a heart-in-mouth moment for the home fans as French veteran Jean-Christophe Peraud (Ag2R-La Mondiale) hit the deck hard.
Marcel Kittel wins the final stage in Paris (AFP)
Peraud recovered to complete the stage and secure his shock second-place on the podium, 7min 52secs down on winner Nibali. Another Frenchman, Thibaut Pinot (FDJ), competed the top three at 8:24 in arrears.
Kittel, 26, said his victory in the 154.5km final stage of the race capped a "wake-up call for the people at home in Germany". Kittel's four victorious sprints added to Tony Martin's two-stage salvo and a solitary win for national champion Andre Greipel gave Germany their biggest haul ever in the Tour de France.
Greipel finished fourth in the final sprint ahead of Australia's Mark Renshaw (Omega Pharma-Quick Step), Austria's Bernhard Eisel (Team Sky) and French youngster Bryan Coquard (Europcar).
Slovakia's Peter Sagan - who won the green jersey competition for the third successive year at a canter - could only take eighth place in the final sprint, meaning the Cannondale rider failed to notch a victory throughout the three-week race despite his consistently high finishes (which included four second places).
Poland's Rafal Majka (Tinkoff-Saxo) secured the polka dot jersey as best climber thanks to stage victories in both the Alps and the Pyrenees. 24-year-old Pinot was the white jersey as best young rider in the race.
In Peraud and Pinot the host nation were rewarded with two Frenchmen on the podium for the first time in thirty years: in 1984, the late Laurent Fignon won his second consecutive Tour by beating Bernard Hinault by over 10 minutes.
Two Frenchmen flanking the race winner was an inconceivable scenario entering the race - but the withdrawals of favourites Chris Froome and Contador gave the Tour a new dynamic as Nibali rose to the occasion and made the 101th edition of the Tour very much his own.
NIBALI MAKES HISTORY FOR ITALY: After a dominant performance over the entire three weeks, the Sicilian became the tenth Italian to win cycling's biggest race - and the first since the late Marco Pantani in 1998.
Nibali is the sixth man in history to win all three of cycling's Grand Tours - after Jacques Anquetil, Felice Gimondi, Eddy Merckx, Bernard Hinault and Alberto Contador, the Spaniard who crashed out of this year's race with a broken leg in the Vosges.
Nibali's winning margin of 7min 52secs over French veteran Jean-Christophe Peraud (Ag2R-La Mondiale) is the the largest since Merckx's fifth and final victory in 1974.
In stark contrast to his victory in the 2010 Vuelta a Espana - in which Nibali didn't record a single stage win - the Italian national champion won his maiden Tour in swashbuckling style, with victories on the race's second day at Sheffield, La Planche des Belles Filles in the Vosges, Chamrousse in the Alps and Hautacam in the Pyrenees.
The 29-year-old wore the yellow jersey for the majority of the race, taking the race lead in Sheffield and relinquishing the fabled maillot jaune for just one day - fittingly to Frenchman Tony Gallopin on Bastille Day.
"It's a huge emotion for me," a near-tearful Nibali said from the top of the podium after the biggest victory of his illustrious career.
"Now that I'm here on the highest step of the podium in Paris it is more beautiful than I ever imagined. I have worked so hard for this with my preparations going back to the winter.
"I must thank my team-mates at Astana - all of whom managed to finish the race; my sporting director Giuseppe Martinelli, the best in the business; my fans, my family and especially my parents, who always encouraged and supported me.
"Finally, thank you to the Tour, the French and everyone who has come today and who has watched the race since the start."
VOIGT'S FINAL HURRAH, PERAUD'S SCARE: Riding his seventeenth and final Tour, 42-year-old German veteran Jens Voigt (Trek Factory Racing) gave his fans something to cheer when he attacked early on the second lap on the Champs-Élysées. Voigt opened up a small gap of 10 seconds before being reeled in as a four-man escape group formed.
"I'm going to miss this," Voigt said after his final appearance on the Tour. "Seventeen years is a big chapter in my life. I worked out that I've ridden 340 stages in total - which is almost an entire year spent doing the Tour de France. I really must love this sport, right - or I must be plain stupid."
Those four escapees Richie Porte (Sky), Michael Morkov (Tinkoff-Saxo), Jose Serpa (Lampre-Merida) and Armindo Fonseca (Bretagne-Seche) opened up a maximum lead of 26 seconds before the teams of the main sprinters combined to reel them in.
Fonseca was first to flounder, the Frenchman sitting up after an untimely puncture. On the penultimate lap, with 13.5km remaining, Porte soloed off the front but the Sky rider's surge was short-lived. Another Australian, Simon Clarke of Orica-GreenEdge, tried to break clear on the final lap but he was easily swept up as the Giant-Shimano, Lotto-Belisol, Katusha and Omega Pharma-Quick Step sprint trains formed as the peloton zipped down the Rue de Rivoli at a ferocious pace.
Kristoff - whose main lead-out man Luca Paolini suffered a puncture with 13km remaining - looked to have a third stage win in the bag before Kittel mustered the strength to power through to take his fourth win.
"I mush give a big thanks to my Giant-Shimano team-mates who were excellent throughout the Tour," said Kittel. "I tried to pass Kristoff. He couldn't accelerate and I managed to just do it before the finish."
Earlier, a small pile-up in the Place de Concorde with 42km remaining brought down runner-up Jean-Christophe Peraud (Ag2R-La Mondiale) and a handful of other riders, including Swiss national champion Martin Elmiger (IAM Cycling). Clearly shook up and his jersey badly torn, Peraud - the 37-year-old Frenchman who switched from mountain biking to road racing late in his career - was paced back into the peloton by four team-mates to secure his unexpected place on the second rung of the podium.
LAST BUT NOT LEAST: Chinese lanterne rouge Cheng Ji (Orica-GreenEdge) was fittingly the last man to complete the final stage of the Tour. Ji was one of the riders who hit the deck in the crash that felled Peraud, and the first Chinese man to ride the Tour was lapped by the peloton before coming home to complete his Tour - more than six hours behind the winner, Nibali.
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