Stoke legend Taylor, 56, claimed the £100,000 top prize in the PDC's first BBC-televised event as he capped an imperious weekend in Wales with victory over the current world number one.
Taylor had overcome the Dutchman on Saturday during the group phase of the event, and after the pair defeated James Wade and Gary Anderson respectively in the semi-finals the 16-time World Champion produced one more stunning display in the decider.
A strong start saw Taylor take an early 4-1 lead, missing two doubles in the leg which he lost, before the Dutchman produced an 11-darter and a 110 finish to pull back to 6-3.
Taylor then landed seven perfect darts in the tenth leg before finishing an 11-darter to move 7-3 up, and then punished misses from van Gerwen to pull six legs clear.
Van Gerwen hit back by finishing tops and 70, but the 15th leg proved crucial as the 27-year-old landed a 180 and 171 only to see Taylor finish 81 on the bull move to the brink of a win which sealed in style with a 114 checkout.
"It's fantastic," said Taylor. "I'm over the moon with this. Just to get to the final is tough, it's the top eight players in the world and it's hard work.
"To play three games in one day for me is tough. I was worried about the final, with my energy levels, but I seemed to click at the right times and hit the right shots and put Michael under pressure.
"Michael's brilliant, he's just won three or four tournaments on the trot but maybe that showed in the final. Michael's a better player than that - he didn't perform like he can and I did. I took advantage."
Taylor - whose last win a BBC-televised event came at the 1992 BDO World Championship before the formation of the PDC - added: "I've really appreciated the Cardiff crowd, who were brilliant.
"It's massive for me. For me to get back on the BBC is brilliant. It's a different audience because it's terrestrial TV and it's been a great weekend."
Van Gerwen picked up £50,000 as runner-up, but after winning four tournaments in the past week he admitted: "Maybe the tank was empty but I know I can do a lot better.
"Phil was the better player, he won all his games this weekend and fair play to him. You can't win all the time but hopefully I can do something good in the next few tournaments.
"I feel fantastic but I let myself down this weekend. I'm disappointed with myself and I need to have a moment of rest."
World Champion Anderson had topped Group B with wins over Michael Smith, Adrian Lewis and Wade, but saw van Gerwen come from 4-2 down in their semi-final to power to an 11-5 triumph.
Wade finished second in Group B but fell to an 11-3 loss to Taylor at the last four stage, although the left-hander claimed £25,000 in prize money.
Unibet Champions League of Darts
Sunday September 25
Phil Taylor 11-3 James Wade
Michael van Gerwen 11-5 Gary Anderson
Phil Taylor 11-5 Michael van Gerwen