The 5-4 shoot-out win - following a 1-1 draw in normal time - exacted revenge for a humiliating 7-1 World Cup semi-final defeat to Germany two years ago.
Olympic gold was the only major title to have escaped five-time world champions Brazil in their history.
But Barcelona star Neymar righted that historical wrong as he fired the winning penalty into the top corner before breaking into tears.
In front of the biggest crowd of Rio's Games, including nine-time Jamaican gold medalist Usain Bolt, Neymar's brilliant free-kick handed Brazil a first-half lead.
In honor of the retiring sprinting great, Neymar even adopted the “lightning bolt” celebration, whilst chants of “ole, ole, ole, Neymar” rang around Rio's most iconic arena.
However, Germany captain Max Meyer enjoyed a special celebration of his own as he taunted the raucous 78,000 crowd at the Maracana by kissing the number seven on his shirt when he swept home Jeremy Toljan's cross just before the hour mark.
The first eight penalties in the shootout were all successful before Brazil goalkeeper Weverton stopped Nils Petersen's effort to set the stage for Neymar.
And he didn't disappoint as, with the weight of a nation on his shoulders, he rifled the ball into the top corner.