The 28-year-old Swede, who had previously put out Heikki Kovalainen and Sebastien Bourdais in previous rounds, did the unthinkable by beating home favourite Loeb in a Citroen Xsara like the one the Frenchman won this year's world rally title in.
The 2003 DTM champion and occasional WRC competitor then rounded out a more routine victory as the pair faced off in Renault Trophy Meganes to complete his 2-0 victory.
Ekstrom said: "That was more than cool. I just thought it would be flat-out, but I knew it would be so tough to beat Seb in his own car. If you ask anybody, they would say it"s not possible.
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"I messed up the start and I think that got the adrenaline pumping. It's just a great feeling to beat Seb."
Loeb, who had previuosly won the event in 2003 and 2005, was gracious in defeat.
He said: "Mattias has done a great race, he"s a good ride on track iand in rally. He was just faster."
Ekstrom's win was the first for a Swedish driver on the event since rally legend Stig Blomqvist trimuphed in 1990.
Semi-Finals - Ekstrom shocks Bourdais
Not content with putting out 2004 winner Heikki Kovalainen in the quarter-finals, Ekstrom - the RoC's surprise package - showed inspired form in the semi as well, as he edged a slight advantage over Sebastien Bourdais.
So desperate was the ChampCar title-winner to make it an all-French final that he pushed too hard, slamming his Renault Trophy Megane into the barriers with a lap to go and ripping the bodywork off the right-front of his car.
That incident cost him any chance of progressing and let a shocked Ekstrom - who has competed in the WRC before - into the final.
In the other contest, 1998 RoC winner Colin McRae tried to deny the French crowd having any home drivers to cheer for in the final.
But the Scotsman was powerless to stop Loeb, who strung together four laps much smoother than his rival as both drove Citroen Xsaras.
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