The 23-year-old Briton can expect to earn a minimum £100million a year following one of the most exciting finales to a race the sport has ever witnessed.
This far eclipses the £31million that David Beckham earned last year and even surpasses the £72million earned this year by Tiger Woods.
British viewers held their breath as Hamilton overtook another driver on the last bend of the Brazilian Grand Prix to rescue the world championship with seconds to spare.
He had needed to come fifth in the race to finish top of the championship ahead of his nearest rival Felipe Massa, even if Massa won. With three laps left, and Brazilian Massa in the lead, Hamilton was back in sixth after having stopped to change his tyres to suit the wet conditions.
Massa's Ferrari team-mates were already celebrating when he roared over the line.
But their jubilation turned to dismay when Hamilton's McLaren sped past Toyota's Timo Glock, who was still using dry-weather tyres, to secure the fifth place he needed.
There were boos from the crowd who were furious that Massa had been deprived of the championship.
Hamilton's father Anthony said:'It's a shame the crowd is doing this. They should be fair sportsmen.'
The latest British sporting hero's achievement is made all the more remarkable because he has been labelled the 'outsider' and has endured racist chants from Formula One fans this season.
His thrilling victory also buries the ghost of 2007, his debut year, when he led the championship only to fail in the final two races.
Hamilton's boss at McLaren, Ron Dennis, said: 'Who would have thought that Glock would have stayed out on dry tyres? It seems like Toyota have made a mistake with the tyres they chose. It's all a bit technical, but there doesn't seem like anything dodgy or untoward.'
Hugging his father after the race, Hamilton said: 'It is pretty impossible to put it into words. I'm so speechless.
'It has been such a long journey with a lot of support back home. I am so thrilled to be able to do this for everyone. I can only thank God. I was trying my hardest to get past. It was one of the toughest races of my life, if not the toughest.'
He said that as he passed the finish line he still did not know if he had won. When he heard the confirmation he said: 'I was ecstatic'.
His father said he too was left speechless by the dramatic finale.
'I really can't find the words,' said Mr Hamilton. 'It's great, absolutely great.'
Hamilton is the first Briton to take the world championship since Damon Hill in 1996.
In the Caribbean, his 77-year-old grandfather Davidson spoke of his 'pride and joy' after watching the race on the TV at his home in Grenada.
'We are all so very proud of Lewis,' he said. 'We always knew that he would be champion one day. He is a wonderful grandson and has made the Hamilton family very happy.'
Gordon Brown said he was 'thrilled' by Hamilton's 'exceptional talent'.
'I, like so many, want to congratulate him on becoming the youngest world champion in Formula One history,' he said. 'The first championship, I think, of many that he's going to win in years to come. I think the whole of Britain are proud of the inspirational Lewis Hamilton and the McLaren team.'
Tory leader David Cameron also offered his congratulations saying that the champion had made the whole country 'so very proud'.
'One of the most dramatic races in Formula One history ended with the right man winning the World Championship,' he said.
