Gardner stayed in the top five throughout all eight stages, winning the sixth and seventh stages by a clear margin.
Andrew Graves (Gore) led after the first stage but defending champion Dean Bond took over after the second.
Rally favourite Bond's lead was shortlived, however, as he went off the road and out of the rally in the third stage - Cannibal Bay - the same stage which handed him the victory in the rally last year.
For the next few stages, Graves looked set for a comfortable win as the main interest centred on whether Derek Ayson, of Gore, could head off Gardner for second place, as he fought back after a suspension breakage.
The turning point came in the sixth and seventh stages.
Gardner won both stages, turning the rally upside down as he turned a 44sec deficit into an 18sec lead.
The real damage was done in the 35.21km Puerua Valley (stage six) where Gardner took victory by 26sec over Ayson, with Graves a further 16sec back.
That left Gardner just 2sec behind Graves and, by the next stage, he had moved into the lead.
The final 1.1km stage was a formality, as Gardner won the rally in a time of 1hr 32min 38.8sec.
Gardner put down his win to being "fully committed" over the two stages that made the difference.
In taking top honours, Gardner and co-driver Blair McLaren won the Darryl Robinson Memorial Trophy and the Kerry O'Donohue Memorial Trophy, for first South Otago crew home.
Gardner was "absolutely stoked" after the win.
A former motocross and mountain bike competitor, Gardner got into the sport after watching the Catlins rally pass the gate of his home several years ago.
It was only the second full rally for Gardner in a four-wheel-drive car. He won the allcomers section at the Rally of Otago in his first and now has his second win under his belt.
Graves and co-driver Jared Leebody came second in their Mitsubishi Evo 3.
He said Gardner was the "dark horse" of the rally and knew he would be quick through the sixth and seventh stages.
"I tried to make up as much time as I could before that point but it wasn't quite enough.
"When we had a 44sec lead, I wasn't sure if it was enough."
Ayson and co-driver Gav McDermott (Christchurch) were third in their Mitsubishi Evo 8, broken suspension cost them a minute to their rivals in the second stage.
Deane Buist, of Christchurch, was fourth in his Ford Escort BDA - the first two-wheel-drive car home - winning the class C title and Gore driver Paul Cross placed fifth in a Mitsubishi Evo 3. Kaiapoi driver Marcus Van Klink came sixth in his Toyota Corolla, followed by Gary Reynolds, of Greymouth (Evo 3), and Scott Simpson, of Oamaru (Evo 5), Neville Krammer, of Wallacetown (Subaru Legacy), and Balclutha man Barry Mills rounded out the top 10, in a Hillman Avenger. Mills also won class F.
In the other classes, Tayler Jansen, of Christchurch, won class A in a Datsun 1200, Mike Verdoner, of Balclutha, claimed class G, finishing 12th overall, while Invercargill driver Carter Strang won class B.
The class D title went to Scott Simpson, of Oamaru, and class E to Paul Cross, of Gore, as the top three overall cannot take class honours.
Mark Laughton and Michael Cooper, of Dunedin, were the first Otago Sports Car Club crew home in their V8-powered Hillman Avenger, and won the Glen Shirlaw Memorial Trophy.
