A closing 68 gave Molinari a 17-under-par total and two-shot winning margin over playing partner McIlroy, with defending champion Alex Noren and Denmark’s Lucas Bjerregaard a shot farther back.
Molinari, whose second place 12 months ago was his fifth top-10 at Wentworth in the last six years, began the day in a tie for the lead with McIlroy but quickly moved clear with birdies on the third, fourth and eighth and never looked like being caught until almost making a mess of the 72nd hole.
Three ahead playing the par-five 18th, Molinari’s third shot to the green almost span back into the water and his fourth left him facing five feet for par, with McIlroy 20 feet away for eagle.
However, McIlroy agonisingly left his attempt inches short and Molinari held his nerve to hole out for par, meaning he had dropped just two shots all week, the last coming on the 10th hole of the second round.
The impressive win will take the 35-year-old back inside the world’s top 20 and into the automatic qualifying places ahead of the Ryder Cup at Le Golf National in Paris in September.
“It feels amazing,” Molinari said. “I’ve been close so many times.
“I think if I could pick one tournament to win in my career it would be this one. To finally get over the line feels amazing and it wasn’t easy. I made it probably more interesting than it should have been.
“Obviously I was hoping Rory wouldn’t make his putt because I wasn’t fancying mine after all that hard work today, but thankfully I holed it anyway.”
Asked about the prospects of a third Ryder Cup appearance at a venue where he has finished runner-up three times in the French Open, Molinari added: “I was too far too back to seriously think about it until this week, but now it’s there and on a course that I love and where I have almost as good a record as I do here. I would love to be there.”
McIlroy had enjoyed a three-shot lead at halfway following rounds of 67 and 65, but struggled to a 71 on Saturday and rescued a 70 on Sunday with birdies on the last two holes.
The 29-year-old had worked on changes to his swing since missing the cut in the Players Championship and said: “I think when you’re working through a bit of a swing change or a swing tweak, it takes more than a week’s work to try to bed it in and this is my first competitive start since trying to rectify things.
“It’s close, it’s very close. I’ve given myself a great chance here this week. I didn’t quite pull it off but it’s not far away. I get a bit down on myself because my expectations are high and with a 36-hole lead I should have closed it out.
“It’s disappointing but that’s not taking anything away from Francesco. He played a great weekend and bogey-free around here is some playing. He deserved the win.
“I just need to do a little bit more work and I’m looking forward to getting right back at it at Memorial next week.”
Bjerregaard’s closing 65 equalled the lowest score of the week, despite starting with a bogey, while Noren’s 67 ensured he put up a stout defence of the title he won with a course-record 62 in the final round last year.
Shota Akiyoshi, Michael Hendry, Masahiro Kawamura and Masanori Kobayashi secured their places in the 147th Open Championship after qualifying via the Mizuno Open in Japan.
Akiyoshi secured his first tournament victory on the Japan Golf Tour after carding a closing 70 to finish one under par, a shot ahead of Hendry, Kawamura and Kobayashi.
The quartet will contest the Open at Carnoustie from July 19-22 after finishing as the leading four players in the top 12 and ties who were not already exempt.
England’s Jodi Ewart Shadoff was just two shots off the lead after the third round of the LPGA Volvik Championship.
Shadoff, from Catterick, fired a three-under par 69 to sit among a group of four tied in second place, an eagle and three birdies helping to mitigate three bogeys on the 10th, 11th and 16th holes.
The 30-year-old, who has been absent from the tour for a month due to a back injury, said: “I had a hole out on number four which really got my round going. I holed some decent putts, a couple of iffy drives in the middle of the round, but a couple of birdies at the end so overall it was pretty decent.”
Joining her on 10-under par overall were Americans Stacy Lewis and Lindy Duncan, and In-Kyung-Kim, of South Korea, all two shots adrift of Australian leader Minjee Lee.
Lee hit a four-under 68, while England’s Bronte Hull, tied in sixth place, posted a round of 69 to sit on nine-under par overall.