The Swiss classics specialist made his decisive attack on the Kwaremont climb before opening up an unassailable lead over his rivals to underline his credentials ahead of next Sunday’s Ronde van Vlaanderen.
Pre-race favourite Peter Sagan of Slovakia took second place from a chasing group one minute and seven seconds down on Cancellara, the Cannondale rider edging out former team-mate Daniel Oss of BMC and Geraint Thomas of Team Sky.
Belgian national champion Tom Boonen, the defending E3 champion and holder of a record five wins in the cobblestone race, led the peloton over the line 2:17 in arrears.
Thirty-two-year-old Cancellara, winner of E3 in both 2010 and 2011, took his third scalp over the cobbled roads of Flanders after thwarting the strength in depth of both Team Sky and Omega Pharma-Quick Step.
Both ‘super teams’ boasted four riders apiece in an elite leading group as the race entered the final 60 kilometres – and although it was Boonen who put in an initial leg-stretching attack on the Taaienberg, it was a composed Cancellara who took the spoils at the end of a thrilling day’s action.
The 211km race – which took in many of the climbs that feature in Sunday’s second ‘Monument’ of the season, the Tour of Flanders – started under grey clouds and icy temperatures.
A group of six riders - all clad in leg warmers - formed off the front after an initial attack was made by Spanish track specialist Eloy Teruel of Movistar some 35km into the race.
The escapees - Anders Lund (Saxo Bank-Tinkoff), Ruslan Tleubayev (Astana), Wouter Mol (Vacansoleil-DCM), Koen Barbe (Crelan), Stefan van Dijk (Accent Jobs) and Teruel - built up a maximum lead of three minutes over the peloton before being swallowed up 65km from the finish.
Team Sky seemed to have control over the race when Boonen made his attack moments later on the Taaienberg, the eighth of 15 small climbs in the undulating parcours. The Belgian’s attack sparked a frantic response from his rivals with a select eight-man group soon coming together.
In this group were the likes of Cancellara, Sky pair Edvald Boasson Hagen and Mathew Hayman and the Belgian Jurgen Roelandts. But Milan-San Remo runner-up Sagan missed the cut and, following an untimely bike change, was forced to fight back on to the main pack at a key moment in the race.
With some chasers joining the leaders, a new select group of 11 riders formed on the front of the race approaching the final 50km: Boonen and his Omega team-mates Stijn Vandenbergh and Zdenek Stybar (Omega), Cancellara,Oss, Roelandts, Hayman, Boassan Hagen (Sky), Lars Boom (Blanco), Sebastian Langeveld (Orica-GreenEdge) and Vincent Jerome (Europcar).
The Cannondale team of Sagan led the chase and soon their man had made contact with the leaders following the Kapelberg climb. World champion Philippe Gilbert (BMC) failed to follow Sagan’s lead, but his BMC team-mate Greg van Avermaet led the chase with the likes of Sky’s Ian Stannard and Thomas, Omega's Sylvain Chavanel, Juan Antonio Flecha (Vacansoleil-DCM) and Andrey Amador (Movistar).
Just as the leading groups were beginning to merge, Cancellara defied the concept of strength in numbers by putting in his decisive attack on the arduous cobbled climb of the Kwaremont.
Sagan tried to follow but could not match the experienced Swiss for power. The 23-year-old formed a select chasing group with Chavanel, Oss, Thomas and Langeveld. Boasson Hagen rode in limbo between the Sagan group and a larger Boonen group, by which he was soon consumed.
With only one more climb to tackle and the roads becoming wider and less taxing, Cancellara shifted into full time trial mode as he opened up a gap of one minute over the chasing quintet, while the second Boonen group threw in the towel and were caught by the peloton.
The lead dropped to just 40 seconds with 12km remaining after Chavanel and Sagan combined with some hefty pulls for the chasing group.
But Cancellara used all his strength and experience to extend his advantage going into the closing kilometres and had the luxury of passing under the ‘Flamme Rouge’ safe in the knowledge that the victory was his.
The win was Cancellara’s first of the 2013 season – and his first since the prologue of last July’s Tour de France.
Oss attacked his fellow escapees inside the final 500 metres but was pipped to the line by Sagan, with Thomas settling for the first rung off the podium. It was Sagan's third runner-up spot in major races this season.
Langeveld took fifth and Chavanel sixth before the peloton arrived 50 seconds later, with Boonen taking the sprint ahead of Luca Paolini (Katusha), Boasson Hagen and 10th place Sebastien Turgot (Europcar).
With the Ronde van Vlaanderen less than 10 days away, Cancellara has now put himself in pole position to take a second victory in the race which last year saw him crash out with a broken collarbone.