The 26-year-old succeeded Usain Bolt for the title, upgrading from his Rio 2016 silver, beating American pair Kenny Bednarek and world champion Noah Lyles, who was leading heading into the final straight.
Bednarek then had gold in his sights, before De Grasse powered through in the closing 30m.
De Grasse is the first north American champion in the 200m since Shaun Crawford won at Athens 2004, with Bolt then dominating the sprints from Beijing onwards before retiring.
Often the nearly man, he is also a silver medallist in the distance from the 2019 World Championships, which Lyles won, and he won bronze in the 100m in Tokyo and in Rio, as well as the 2015 worlds in Beijing. But with this victory, he elevated his status to leading man and made himself the eighth quickest 200m athlete ever.
At the end of his victory lap, with the Canadian flag draped around him, De Grasse celebrated with his family – including his wife and 100m hurdles world champion Nia Ali – on a screen via video link.
Emmanuel Korir headed a Kenyan one-two in the final of the 800m, beating Ferguson Rotich to gold in 1:45.06. Poland’s European Indoor Champion Patryk Dobek got bronze, but there was a big surprise as London 2012 silver medallist Nijel Amos – who went into the final as the fastest in the world this year – could only finish eighth.
Korir was second quickest on that same night in Monaco last month, and built on that promise to take the Olympic title from David Rudisha, who has not raced competitively in over four years following surgery on an ankle fracture.
Uganda’s Peruth Chemutai set a national record of 9:01.45 to win 3000m steeplechase gold ahead of the USA’s Courtney Frerichs and Hyvin Kiyeng, as Lizzy Bird set a new British record in the discipline by finishing ninth in 9:19.68.
Britain’s Nick Miller produced a season best effort of 78.15 to finish sixth in the hammer throw final. Poland’s Wojciech Nowicki upgraded from his bronze in Rio to win gold ahead of Norway’s Eivind Henriksen and Polish team-mate Pawel Fajdek.
“I’m a little disappointed. I got a cramp in my calf, but after a pretty bad year of injury, sixth isn’t bad but I’m capable of more,” Miller told Eurosport.
“I was in pretty good shape, I don’t think I threw as well as I should of. It’s sixth place at the Olympics, it’s not terrible, but that’s why we’re athletes right, we’re hungry.”