Movistar's own Benjamin Button let the world champion do all the work in the final 100 metres of the 195km stage from Linares to Almadén.
With arguably the sharpest racing brain of his and subsequent generations, Valverde waited til the last moment before sweeping past the rainbow jersey to claim his second victory of this year's race. LottoNL-Jumbo's Danny van Poppel finished in third.
The cycling world ran out of superlatives to describe the 38-year-old long ago. A prolific winner since his teen years, Valverde continues to tap into a fountain of youth denied many of his now-retired contemporaries and it seems like there is no end in sight.
“They told me it would be a good finish for me," he said. "The idea was not to lose time and then see what I can do. The team put me in a perfect position, it was uphill for the last 500 metres and that always favours me.
"I took Sagan’s wheel and I wanted to go past him on the right side but I was afraid I would get boxed in and Nizzolo was coming on the left. I doubted but I found the opening.
"It’s very motivating to beat Peter in such a finale. It gives me a lot of confidence. I’m feeling good and I want to make the most of my condition, day after day. From tomorrow, we’ll see what can happen for me and Nairo (Quintana). I’m feeling good, without any pressure.”
The general classification remains unchanged with Rudy Molard (Groupama-FDJ) still riding high after an uneventful day in the saddle.
How Stage 8 went down
Tiago Machado (Katusha-Alpecin), Jorge Cubero (Burgos-BH) and Hector Saez (Euskadi-Murias) formed the day's break and enjoyed a lead of up to 12 minutes before the sprinter's teams upped the pace of the peloton.
Benito took the maximum KOM points on the Cat-3 Alto de Españares and Cubero the intermediate sprint at Villanueva de Cordoba as the gap dropped to under eight minutes with 70km and the punchy finale in Almadén ahead.
The break ended with six kilometres to go when Machado was the last of the front trio absorbed by the peloton as the chancers jockeyed for position.
Spain's grand tour continues with the 200km, Stage 9 from Talavera de la Reina to La Covatilla. Expect general classification fireworks: especially on the final category one climb to the finish. The 10km Alto de la Covatilla with an average gradient of seven per cent should sort a few things out.