Wiggins, who virtually sealed victory when he won his second time-trial of the three-week epic on Saturday, finished the 3 479km race with a 3min 21sec lead over British team-mate Chris Froome after the 20th and last stage.
It was Isle of Man sprinter Cavendish's fourth consecutive stage win on the Champs-Elysees, taking his tally of stage wins in this year's race to three and to 23 overall.
Three years after Wiggins equalled Scot Robert Millar's 1984 best British finish of fourth overall, in 2009, Wiggins finally achieved his childhood dream of winning the world's most prestigious bike race.
Italian Vincenzo Nibali of the Liquigas team finished third overall at 6:19.
Team Sky achieved the rare feat of a 1-2 on the podium, the first since 1996, when Dane Bjarne Riis finished ahead of his German team-mate at Telekom, Jan Ullrich.
It is also the first time compatriots have taken the first two places since France's Laurent Fignon finished ahead of five-time winner Bernard Hinault in the 1985 edition.
Frenchman Thomas Voeckler of Europcar won the polka dot jersey for the race's best climber, with Slovakian Peter Sagan of the Liquigas team easily securing the green jersey for the points competition.
American Tejay Van Garderen made up for BMC team leader Cadel Evans' disastrous title defence by winning the race's white jersey for the best-placed rider aged 25 and under.
Evans, who made history by becoming Australia's first champion in 2011, eventually finished nearly 16 minutes behind Wiggins.
From 'failure' to champ
Whether he likes it or not, Bradley Wiggins' history-making feat at the Tour de France is set to overshadow his previous gold medal-winning exploits in the Olympic velodrome.
But the Belgian-born Londoner, who grew up in Kilburn dreaming of winning the coveted yellow jersey, is hoping his achievement will not go to his head.
"I'm determined to not let it change me," Wiggins said on Saturday after virtually sealing his and Britain's maiden win in the event with victory in the penultimate stage time-trial.
"I'm not into celebrity life, red carpets and all that rubbish."
For a man with a rocky childhood and a grudge against an absent father who died in a drunken stupor in 2008, Wiggins seems unaffected.
He is a dedicated family man who appreciates simple things like "walking to the local shop to buy a loaf and a pint of milk".
Born in Ghent, Belgium, Wiggins was brought up in London "listening to Oasis" and "dreaming of winning the yellow jersey" after his mother and father split up.
Garry, his Australian father, was a well-known track cyclist who specialised in Six Day meetings.
However, Wiggins had little contact with Garry and still seems not to have forgiven him.
Asked during this year's race if he thought his father would appreciate seeing his exploits if he could, Wiggins replied: "I don't know really. Depends if he was sober… I've put that one to bed."
Aiming for greatness
It did not stop him from harbouring his own dreams of cycling success.
While watching Tour de France hero Miguel Indurain stamp his authority on the race from 1991-1995, Wiggins began cycling at Herne Hill Velodrome, the venue for the 1948 Olympics.
At the age of 18 he became a junior world champion and just two years later won the first of his six Olympic medals — three of which are gold — at the Sydney Games.
In 2002, Wiggins made his first foray on to the road with the French team FDJ.
Even then, there was nothing fancy about Wiggins, recalls FDJ team manager Marc Madiot: "I remember him wearing these tatty old trainers and an old England top, and I thought to myself, 'This kid is hungry for success.'"
His first taste of the Tour de France in 2006 was a bitter one, as he finished 124th overall and complained "it is too hard".
A year later, it did not get much better, as his Cofidis team were forced out of race when team-mate Cristian Moreni tested positive for banned blood booster EPO.
Wiggins recovered to win two gold medals at the 2008 Beijing Olympics as he defended his individual pursuit crown and won team pursuit gold.
On the road, his career had stalled, but his move to the Garmin team for the 2009 season was an inspired one, as he finished fourth overall at the Tour, being pipped for third at the finish by Lance Armstrong.
For many it was a surprise, but he benefited from working with Garmin team manager Jonathan Vaughters and retained faith that his "engine" could bring as much success on the road as it had in the "comfort zone" of the velodrome.
"I was capable of so much more and the people around me were aware of that," Wiggins said. "I've always had the engine, it's just getting those people to get that out of me."
Vaughters then fought a hard but futile battle to keep Wiggins when Sky put a lucrative contract on the table in 2010.
Sky is the limit
Sky finally got their man, but despite having the best of sports science at his disposal, and losing several kilogrammes for the mountain stages, he flopped at the 2010 Tour de France, finishing 23rd overall.
His crash on stage seven last year was a huge blow, but was one of several setbacks that made him more determined coming into this year's race.
Having won the prestigious Criterium du Dauphine in June 2011, he rebounded from his Tour crash by finishing third at the 2011 Tour of Spain.
A monk-like existence of training in Majorca and at high altitude in Tenerife helped him to wins earlier this season in Paris-Nice, the Tour of Romandie and a successful defence of his Dauphine crown.
Wiggins might now lose some of his coveted anonymity, but if he survives the anti-doping scrutiny that has snared several past champions, he will become an inspiration to millions.
"When you are 12 and say you want to be the winner of the Tour de France, no-one imagines it is going to happen," he said.
"Here I am, 20 years on, and it's a reality. Who would have thought a boy from central London would do it?" — AFP.