The 41-year-old picked up a cheque for £50,000 and grabbed the final spot for the Players Championship next week.
Holt won seven matches in Watford across four days, showing composure with breaks of 42 and 22 to see off China’s Zhou Yuelong at the final hurdle.
'The Hitman hits big!' - Holt downs Zhou in Shoot Out final
"I'm just really lucky," said Holt, who lost last year's final to Thepchaiya Un-Nooh.
"I enjoy the format. It actually helps me because I’ve always stopped myself playing by thinking and it doesn’t give me time to think. So I can just play on my instinct and then play my best."
Sunday's evening session promised to whittle the remaining 16 players down to one as the single-frame, clock-evaporating spectacular reached its finale.
There was an unfamiliar line-up after fancied top 10 players Ronnie O’Sullivan, Mark Williams, Mark Selby and Kyren Wilson all suffered early exits.
And it was Holt who survived the final cull as he secured a first televised title and belatedly got his hands on silverware.
Holt: 'I’m just really lucky!'
Michael Holt moved within one victory of a first ranking title with a 59-16 victory over Yan Bingtao, reaching the Shoot Out final for a second consecutive year.
Zhou Yuelong, also without a ranking title, beat Lyu Haotian 44-33 as the clock ran out on his Chinese compatriot.
Zhou Yuelong became the first player to reach the last four with a scrappy win over Mei Xi Wen, with nerves littering the quarter-final clashes as the £50,000 prize money loomed large.
An incredible sequence of misses littered Lyu Haotian’s narrow win over Anthony McGill, with the scoreboard locked at 37-33 for over three minutes.
Michael Holt came through against Ben Woollaston, while Yan Bingtao saw off Anthony Hamilton.
Shaun Murphy became the first casualty of the fourth round after losing a tense battle with 2017 champion Anthony McGill, leaving Yan Bingtao as the only top 20 player left in the tournament.
Yan promptly dispatched Craig Steadman to reach the last eight, but the performance of the round came from Chinese compatriot Zhou Yuelong.
Zhou was staring down defeat after opponent Billy Joe Castle notched 39 points, but the 22-year-old sent a magnificent long red home before sinking a memorable 77 break to progress.
Michael Holt, Ben Woollaston, Anthony Hamilton, Lyu Haotian and Mei Xi Wen were the other players to reach the last eight.