The 38-year-old Loeb, who will not defend the crown next year, claimed his record 75th victory for Citroen in his birthplace of Haguenau, in eastern France.
His victory in France also gave Citroen an eighth manufacturers' title, with his team mate Mikko Hirvonen of Finland second in the standings.
Loeb is now on 244 points in the championship table, 71 ahead of Hirvonen who finished third in France, and, with two races to go, is certain to top the standings at the end of the season.
"It has been a great moment," Loeb told reporters. "We had been dreaming of it since the weekend began, it is pure happiness.
"The season has been perfect but I want to enjoy this rather than think about this title being our last together," he added, referring to his co-driver Daniel Elena, who has been with him for the nine titles.
"We could not have dreamt of something better than winning both titles here, in France, in Alsace where Seb comes from," Citroen's boss Yves Matton said.
Loeb was in full control on the wet roads of eastern France as he entered the race's final day with a 54-second lead over Hirvonen, his only rival for the title.
Though he finished no better than fourth in any of the six stages raced on Sunday, he managed to maintain his lead over second-placed Finn Jari-Matti Latvala and third-placed Hirvonen.
The Frenchman, who took a commanding advantage on Friday and never loosened his grip, finished the weekend 15.5 seconds ahead of Latvala in a Ford and 44.1 ahead of Finland's Hirvonen.
Belgian Thierry Neuville, who won five of the six stages raced on Sunday, was fourth.
Loeb's team said last week that the Frenchman would not take part in all of the world championship races next season.
"The pilot who will win next season, will he be able to look himself in the mirror and say he is the best? I do not think so," Christian Loriaux, technical director at rivals Ford, told Reuters. "Beating Loeb has meant beating the best of the best."
Along with his nine world titles, which are unequalled in all motor racing competitions, and his 75 race victories, the Frenchman has set a flurry of records since he claimed the first of his nine wins in the Rally of Germany in 2002.
He clinched a record 11 race victories in a single season in 2008 and had a perfect run in the Rally of Corsica in 2005, where he won all the stages.
Loeb, who combines an aggressive style with a scientific and efficient approach to driving, has been one of the most popular figures in French sport for years.
While Hirvonen will become Citroen's main driver next year, Loeb will be an ambassador for the brand and race a handful of events, starting at the Monte Carlo Rally.
- Mikko Hirvonen