Kennaugh used his well known pursuit skills to hold off Geelong local Leigh Howard (IAM Cycling), who won the race for second ahead of Italian Niccolo Bonafazio of Trek-Segafredo.
Kennaugh was a deserved winner after he launched his attack inside the last 15km, getting as much as 20 seconds clear and still had enough time to raise his arms in triumph at the finish of the 174km race.
“The whole race I was saying ‘stay calm, stay calm’ and I went up the road with a lap to go with a couple of other riders, then just hit it like Richie Porte did on Willunga Hill at the Tour Down Under," Kennaugh said.
“People go on about power all the time these days, I’m not one that likes numbers, but to be honest I’ve been doing a lot of work on that kind of stuff and I just tried to pace myself all the way to the finish and I had the legs. I felt terrible for the first half of the race, but then my legs came around."
The two top sprinters in the race, Mark Cavendish (Dimension Data) and Caleb Ewan (Orica-GreenEDGE), pulled out before the finish.
Orica-GreenEDGE had a painful start to the race when Mitch Docker and then Ewan were involved in separate crashes but managed to return to the peloton safely.
A chase group of six riders built a lead of more than six minutes on the loop that took the race through landmarks such as the Great Ocean Road and Bells Beach.
By the time they were on the first of three laps of the hilly 20km finishing circuit, Australian Pat Lane (Avanti IsoWhey) and Italian Assendro De Marchi (BMC) had the lead.
De Marchi did a superb job in support of Swiss Danilo Wyss, who briefly joined him at the front as the race situation changed rapidly.
By the start of the last lap, Australian Cam Meyer (Dimension Data), Italian Salvatore Puccio (BMC) and Spaniard Rafael Valls (Lotto Soudal) had a 16-second lead over a chase group of four, with the peloton only 30 seconds off the pace.
Valls attacked on the steep Chalambra climb and was joined by Kennaugh, who quickly took the lead by himself.
“I didn’t want to look back once, I’m quite an emotional rider, and the littlest thing like seeing them closing, that’s all it would have taken for me to crack, so I just thought ‘head down, don’t look back until the finish’ and that’s what I did," Kennaugh said.