The 32 year old, whose previous win also came on Portuguese soil two years ago, fired a closing 71 to finish ten under par for the week at the stunning Seve Ballesteros-designed Porto Santo Golfe.
The Northern Irishman started the day level with Jamie Elson, but used his experience to par the first seven holes before a first birdie of the day at the eighth.
Hoey finally dropped a shot at the 13th, but with Chris Gane closing in he kept his cool and a birdie at the next re-established his advantage.
“It was just very very tough,” he said afterwards. “I had to dig really deep, especially after I hit one in the rocks on 13, and I thought ‘that's it now, I've thrown this thing away completely’.
“It's a crazy game. But I somehow managed to make a good swing on the third shot, and holed the putt for bogey, which was huge, it kept me in it. Then I birdied the next, and just parred in after that. The main thing was my putting, I made virtually all the six to seven footers on the way in.
“It's weird, because I think everyone was struggling a bit. If someone had really gone out there and shot a good score, then they could have got to maybe 11 or 12 under, or maybe even better, but nobody did that. Sometimes that happens on the final day and it's quite an ugly win, it was kind of quite ugly today. So I'm lucky to come out on top.
“I guess I knew I had a good chance this week. The last two years I finished sixth both times, and I knew I was putting better and chipping better this year. That's what I did well, I just chipped and putted better than the last two years. It was also windy when I won the Estoril Open at Oitavos Dunes, and I guess growing up in those conditions so that's an advantage.”
Elson (73) and Gane (71) finished tied for second on eight under, while the home fans had reason to be delighted as two Portuguese players finished in the top ten.
José-Filipe Lima finished tied fourth with Lloyd Saltman and Federico Colombo after a four under par 68, while Ricardo Santos was tied tenth after a closing 73.
“I'm chuffed to bits,” said Gane, who stormed into contention with three birdies in five holes after the turn only to then drop a shot at the 16th. “A lot of scenarios go through your mind last night when you're lying in bed. I went out today, played nice and solid and holed a nice put on the last.
“If you'd have said to me start of the day you'd shoot one under I'd have taken it, so I've got no qualms about way it went.”
Earlier in the day Simon Wakefield broke the Porto Santo Golfe course record with a magnificent 63.
The Englishman briefly threatened the first 59 in European Tour history - but needing to pick up two shots in his last two holes he parred the 17th and double bogeyed the par five last.
"I've been threatening to play well for the last few weeks, then yesterday on the range I just found something I felt comfortable with, I had another good session on the range this morning, and took it out onto the course with me," said Wakefield.