The Spaniard entered the final day at The Celtic Manor Resort with a six shot lead but quickly saw that eaten into as he turned in level par, with Harding, Mikko Korhonen and Callum Shinkwin all looking to deny him a wire to wire victory.
A bogey on the 12th saw him caught at the top and while Elvira made birdies on the 15th and 17th, he three putted the last to sign for a 71 and finish at 16 under alongside Harding, who had carded a bogey free 65.
Both men hit the green in three at the first trip back up the par five 18th and after Elvira missed a birdie chance to win it from nine feet, Harding completed a three putt from 24 to hand the 34-year-old the title.
Finn Korhonen finished at 15 under after a 66, a shot clear of Englishman Shinkwin who closed with 67.
Elvira's victory comes at the 195th attempt and sees him finally get over the line after three second place finishes on the European Tour, two of them coming via a play-off.
With four wins on the European Challenge Tour, Elvira's class has never been in doubt, but he arrived in South Wales having not recorded a top ten for over two years and with nine missed cuts in his last 11 events.
Against that backdrop, he had spoken of just being pleased to be in contention this week but he leaves Newport as the third wire to wire winner of the season and just the second Spanish winner of this event after Miguel Ángel Jiménez 16 years ago.
"It means the world," he said. "That’s what we practise for and what we strive for. We try to win, to be at the best level on the European Tour and play with the best. It means the world to me."
He added: "What am I doing to myself? I'm speechless right now to be honest. I thought I had it all pretty under control but to be honest I got pretty nervous on the last couple of putts on the regular 18. I was more calm in the play-off than I was on the 18.
"It's a shame to see someone miss a putt, I suppose they felt the same for me when I missed but I can't believe I won."
"I hope Seve, wherever he is, I hope he's proud," he said of the late Ballesteros. "And I hope José María is proud as well."
Harding trimmed the lead with a birdie from 13 feet at the first and when Elvira failed to get up and down from the sand and then bogeyed the fifth after being fortunate to not find the water, the advantage was just two.
A 25 foot left to righter on the sixth seemed to calm Elvira's nerves and he holed from 12 feet at the next to be five ahead but, while he was standing still, the chasing pack was gathering.
That’s what we practise for and what we strive for. We try to win, to be at the best level on the European Tour and play with the best. It means the world to me
Harding holed a ten footer at the eighth to cut the gap to four and Korhonen added a two putt birdie at the par five ninth to a 50 footer on the fourth to join him at 12 under.
Elvira three putted the eighth but got up and down at the ninth despite being forced to lay up after finding some very thick rough, with Harding making his own birdie with two putts.
Korhonen came up just short of the green at the par five 11th but got down in two from a long way out to get to 13 under, while Harding also birdied with two putts before Korhonen joined him two back thanks to a gain from six feet at the 12th.
A stunning approach left Korhonen with a tap-in at the 14th and when Elvira found a nasty lie off the tee at the 12th and sent his second a long way left, he had been caught.
Korhonen had the lead after he got up down from the bank at the side of the driveable par four 15th, with Harding keeping chase with a 25 footer on the 14th.
Harding got up and down from the sand at the next to join Korhonen at 16 under but Elvira then drove the green to 14 feet and got down in two to make it a three way tie.
A 20 footer on the 17th had Elvira back in front but after Korhonen three putted the 17th, Elvira repeated the trick on the last after laying up and we went to extra holes.
Shinkwin got up and down at the second and holed a 25 footer on the fifth before bogeying the seventh after finding sand off the tee.
He made a 12 foot putt on the eighth and while he gave the shot straight back, he put his tee shot to four feet at the tenth, made a two putt birdie on the next and put a stunning approach to six feet on the 16th.