Starting 20th on the grid after a miserable qualifying session, Power worked his way up the field and effectively won the title when his Brazilian team mate Helio Castroneves was handed a drive-through penalty on lap 218.
"It's 15 years of hard work. I was crying as I crossed the finish line," an emotional Power told www.indycar.com.
"It's surreal. It's just a fantastic way to finish the season. I can't believe I'm the champion."
Power's Penske Racing team mate Castroneves finished 14th in the season finale and 62 points adrift of Power in the final drivers' standings - the fourth time he has been runner up in the championship after 2002, 2008 and 2013.
"It's another second, but well done to Will," said the three-times Indianapolis 500 winner, who had started on pole.
"It stings a little bit, but it motivates me to come back stronger next year and win a championship."
Brazilian Tony Kanaan, the 2004 champion, won the race ahead of New Zealand's 2013 champion Scott Dixon to become the 11th winner this season in 18 rounds of the premier American open wheel racing series.
(Reporting by Nick Mulvenney, editing by Patrick Johnston)
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