"Spartacus" posted a time of one hour, 12 minutes and 15 seconds on the challenging 54.5km course returning to the podium for the first time since the 2008 Beijing Olympics where he won time trial gold and silver in the road race.
The Swiss rouleur clocked the fastest time at each check point bar the second which Dennis claimed. While Cancellara has not triumphed over big TT stars like Dumoulin this year, he has won five times against the clock.
Cancellara sobbed on the hot banana lounge as Froome crossed the line last, with the third fastest time. He exchanged his tears for some jumping for joy at the medal ceremony.
"This was the last time for me to try to win an Olympic medal. It means so much to me," he said.
"To leave the sport at the end of this season with the gold medal is just a perfect way to end my career. It was a big scream on the podium."
Second last over the line but finishing with silver, Dumoulin lay on his back on the ground in disappointment post race.

Spartacus clearly happy with his TT win at the 2016 Rio Olympic Games (Getty) Source: Getty Images
"I had one goal today, and that was gold. So to not win it is a disappointment," he said. "But to reach the Olympic podium is something special, especially after the injury I had at the Tour de France."
Overcoming injury was not the only feat Dumoulin achieved. His silver was the first Dutch medal in an Olympic men's time trial.
Froome was satisifed finishing one minute and two seconds behind Cancellara.
"I'm chuffed (pleased) to win another Olympic (bronze) medal," Froome said. "I gave it everything I had out there today, but Fabian was unbeatable."
Handle bar heartbreak

Australia's Rohan Dennis (Getty) Source: Getty Images
But he suffered a mechanical, snapping his TT handlebars. While the bike change was one of the smoothest and fastest ever seen in racing, it still cost him time and affected his rhythm.
After the race, Dennis explained what happened to his handlebars and was quite philosophical about his fifth place behind Spaniard (Jonathan Castrovejo.
"I just pulled on the handlebars a bit too hard and the roads were a bit bumpy in some sections which didn't help and just snapped the extension.
"I would've at best got second. I was 15 seconds up on Dumouline before the mechanical. These things happen. In four years I hope i don't have the same issue.
"I know I went hard. To win you need to throw it all out there. If I don't try, I don't win."