Martin, the 2011 and 2012 world champion, clocked 1:05:36 over 57.9 kms from Montecatini Terme.
Briton Wiggins took the silver medal, 46 seconds off the pace, with Swiss Fabian Cancellara finishing third two seconds further back in a carbon copy of the 2011 podium.
Martin, using an impressive 58 chainring while Wiggins used a 56, powered through the flat course in Tuscany at an average speed of 52.911 kph - a performance that would have earned sixth place in last Sunday's team time trial, which he won with his Omega Pharma-Quick Step outfit.
"I had put a lot of pressure on myself," the 28-year-old Martin told a news conference.
"I said it before that I wanted to win so finishing second would have been disappointing. I always put a lot of pressure on myself, it's the only way it works with me."
The German, who won a Tour de France individual time trial at the Mont Saint Michel this year, was less than a second behind Cancellara at the first check point.
Martin, a silver medallist behind Wiggins at the London Olympics, was then 14 seconds ahead of Cancellara at the second check point and 29 ahead of the Swiss, a four-times world champion in the discipline, at the third before claiming his 45th professional victory, 32 of them coming from time trials.
Wiggins, who rode solely on power output, finished strongly to deny Cancellara a silver medal.
"I feel pretty relieved that it's over and pretty satisfied with silver," said Wiggins, who will ride Sunday's road race in support of Tour de France champion.
"There is nothing more I could have done. I got the effort about right for the distance. You can't control the others, I just got beaten by a better bike rider."
Wiggins rode the flat course on power output, not paying attention to the time difference.
"If you react to Tony, he was on another level today, you just blow up," the Briton explained.
He did not even know that he and Cancellara were extremely close in the final kilometres.
"I was not really aware of it. The last 15 minutes were a bit of a blur, you're just counting down the kilometres," he said.
"You can't raise it you just try not to slow down."
Cancellara, who won the title in 2006, 2007, 2009 and 2010, was also only focused on his own performance.
"I knew it was going to be a big battle but I didn't even know about where Bradley was," he said.
Martin was the only one keeping track of his opponents.
"I knew I had about 40 seconds at the last check point so the last five kilometres were quite pleasant," he said with a smile.
1. Tony Martin (Germany / Germany) 1:05:36.65"
2. Bradley Wiggins (Britain / Great Britain) +46.09"
3. Fabian Cancellara (Switzerland / Switzerland) +48.34"
4. Vasil Kiryienka (Belarus / Belarus) +1:26.01"
5. Taylor Phinney (U.S. / U.S.) +2:08.00"
6. Rasmus Quaade (Denmark / Denmark) +2:36.33"
7. Marco Pinotti (Italy / Italy) +2:41.92"
8. Adriano Malori (Italy / Italy) +2:51.07"
9. Gustav Larsson (Sweden / Sweden) +2:58.47"
10. Kanstantsin Siutsou (Belarus / Belarus) +2:59.54"