Van Gerwen recovered from a sluggish start to record an 18-14 victory, reeling off the last five legs to scoop the £200,000 top prize and the coveted Phil Taylor Trophy.
“To put my hands on this trophy again means the world to me,” reflected an emotional van Gerwen, competing in just his second event since returning from arm surgery last month.
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“I’ve come through a very difficult patch in my career. To come back and beat a player of Gerwyn’s quality means a lot to me. I am really proud.
“There was drama in the final, phenomenal darts, big scoring, great finishing. You cannot imagine how happy I am.
“It’s the first time I’ve played a final against Gerwyn on Sky Sports, and to win feels incredible.
“I hope we can have a lot more battles like this. I think, before this tournament, a final would have been a dream for me because I’ve been going through a tough period.”
Price was bidding to become the first Welshman to lift the World Matchplay title and, for large periods, he appeared poised to make history, only for van Gerwen to produce a sensational turnaround.
The three-time world champion averaged 101.19, fired in 15 180s and converted five ton-plus finishes to become the second player in World Matchplay history to win a hat-trick of titles.
Early on, Price raced into a 4-0 lead before van Gerwen came agonisingly close to opening his account with a nine-darter in leg five.
He missed double 12 for his second perfect leg at the Winter Garden but a 10-darter provided the catalyst for a stunning three-leg burst which reduced the arrears to 4-3.
The world number three was firing in maximums with regularity but his outer ring woes resurfaced in leg eight with six more misses at double, enabling Price to regain control at 6-4.
The third session saw Price establish a four-leg buffer with legs of 11, 12 and 14 darts, but a brilliant 82 finish on the bull from Van Gerwen, coupled with a 10th 180 and a 12-dart break in leg 15, saw him cut the deficit to 9-6.
Van Gerwen fired in back-to-back 180s and took out 97 in two darts for an 11-dart hold, before pinning an effortless 140 combination to stay two legs adrift.
Price began to display fallibility in the doubling department and van Gerwen capitalised by winning three of the next four legs to level at 12-12.
Following four straight holds, van Gerwen struck the decisive blow in leg 29 with a 130 finish to secure the lead for the first time.
He cemented his advantage with a comfortable hold before moving to within a leg of glory with a 114 outshot.
The Welshman replied with a ninth 180 as he looked to preserve his hopes, but van Gerwen wasn’t to be denied and wrapped up victory with a 121 checkout on the bullseye.