ABU DHABI, January 19, 2014 (AFP) - At the Abu Dhabi Golf Club course, the 30-year-old from Barcelona shot a final-round 67 to finish on 14-under par 274, while world number five Mickelson (69) and number seven McIlroy (68) were tied second at 275.
While Larrazabal was solid throughout the day barring a bogey on the fifth hole, the tournament turned around massively in his favour when Mickelson made a mess of the 13th hole, where he hit the ball twice trying to come out from under a bush playing a right-handed shot.
Mickelson ended up with a triple bogey and from leading the tournament at 13-under par he dropped down the leaderboard, and even three birdies after that could not help him overtake Larrazabal.
McIlroy was left ruing the two-shot penalty that was imposed on him for not taking full relief from a spectators' crossway in the third round Saturday.
South African George Coetzee (66) and Spain's Rafael Cabrera-Bello (68) were tied for fourth place at 12-under par 276.
Larrazabal said: "It just feels unbelievable. I've been working so hard for the last two years and this winter. They always say that the hard work pays off, but it's hard to believe it.
"Today has been very special, to fight against Rory and Phil, top? 5 players in the world, both of them. It's been a great fight.
"I don't know what it does to my career. I don't know if this gets me into any of the Majors. I just want to go back to the hotel, celebrate, and think about everything else tomorrow."
A disappointed McIlroy, who could not get a birdie despite some great chances between the 11th and 17th holes, said: "I feel like I'm standing here and I should be 15?-under par for the tournament and win by one. But that's the way it goes.
"I played the least shots of anyone this week. So, I mean, I can count it as a moral victory more than anything else.
"It's frustrating. I've played well the whole week. It's a very positive start to the season so I'm not going to let one little negative ruin that."
Mickelson also looked at the positives of starting the season well.
"I ended up going with a 3-?wood off that tee and just blocked it in a terrible spot. I tried to right hand it out and I double?hit it. I don't know how, but it happened," said the American.
"I fought hard to make a few birdies coming in. It was just that one swing, because I really struck it well today.
"Hit a lot of good shots, drove the ball well and it was that one tee shot with that 3?wood that did me in. But I am happy with the way I played and felt better with my swing each day."
For Larrazabal this was his third European Tour title, his previous wins coming in 2008 and 2011.
Collated fourth-round scores in the $2.7million Abu Dhabi HSBC Golf Championship on Sunday at the par-72 Abu Dhabi Golf Club:
274 - Pablo Larrazabal (ESP) 69-70-68-67
275 - Rory McIlroy (NIR) 70-67-70-68, Phil Mickelson (USA) 73-70-63-69
276 - George Coetzee (RSA) 68-70-72-66, Rafael Cabrera-Bello (ESP) 67-68-73-68
278 - Joost Luiten (NED) 68-70-72-68
279 - Johan Carlsson (SWE) 73-70-71-65
280 - Robert Karlsson (SWE) 73-67-72-68, Stephen Gallacher (SCO) 70-73-68-69
281 - Darren Fichardt (RSA) 70-70-75-66, Tyrell Hatton (ENG) 69-71-70-71, Peter Hanson (SWE) 70-70-69-72, Thomas Bjorn (DEN) 70-67-72-72, Michael Hoey (NIR) 69-71-68-73, Thongchai Jaidee (THA) 70-70-68-73, Miguel Angel Jimenez (ESP) 73-68-67-73, Gaganjeet Bhullar (IND) 72-68-66-75, Craig Lee (SCO) 68-67-69-77
282 - Brandon Stone (RSA) 71-71-73-67, Sergio Garcia (ESP) 76-68-70-68, Danny Willett (ENG) 73-63-76-70, Paul McGinley (IRE) 68-72-72-70, Thomas Aiken (RSA) 70-73-69-70, Andy Sullivan (ENG) 73-70-69-70, Otto Hennie (RSA) 70-71-69-72, Tommy Fleetwood (ENG) 73-65-72-72, Matthew Baldwin (ENG) 67-72-69-74,
283 - Wade Ormsby (AUS) 69-73-71-70, Edoardo Molinari (ITA) 70-71-71-71, Jose Filipe-Lima (POR) 68-75-67-73,
284 - Matteo Mannasero (ITA) 71-73-70-70, Emiliano Grillo (ARG) 72-72-70-70, Maximilian Kieffer (GER) 71-71-72-70, Alvaro Quiros (ESP) 71-70-70-73, Ricardo Gonzalez (ARG) 71-66-74-73, Martin Kaymer (GER) 70-71-69-74
285 - Luke Donald (ENG) 70-73-71-71, Oliver Fisher (ENG) 69-72-73-71, Raphael Jacquelin (FRA) 71-72-70-72, Marcel Siem (GER) 69-70-73-73, Marc Warren (SCO) 68-73-70-74, Paul Waring (ENG) 73-71-74-67, David Howell (ENG) 73-71-72-69, Shiv Kapur (IND) 71-72-75-67
286 - Colin Montgomerie (SCO) 73-68-74-71, Tom Lewis (ENG) 71-70-72-73, Romain Wattel (FRA) 67-75-70-74, Eddie Pepperel (ENG) 70-72-69-75
287 - Jorge Campillo (ESP) 72-72-73-70, Alejandro Canizares (ESP) 71-69-76-71, Seve Benson (ENG) 73-70-72-72
288 - Julian Quesne (FRA) 71-72-74-71, Darren Clarke (NIR) 74-69-72-73, Branden Grace (RSA) 73-70-70-75, Ricardo Santos (POR) 70-72-71-75
289 - Eduardo de la Riva (ESP) 70-74-72-73, Jamie Donaldson (WAL) 73-70-73-73, Thorbjorn Olesen (DEN) 74-70-71-74, Alexander Levy (FRA) 74-69-69-77,
290 - Jeev Milkha Singh (IND) 69-75-74-72, Peter Whiteford (SCO) 74-70-73-73, Seve Webster (ENG) 69-73-75-73
291 - Jin Jeong (KOR) 70-71-76-74, Nacho Elvira (ESP) 72-70-74-75
292 - Magnus A Carlsson (SWE) 71-71-77-73, Richard Bland (ENG) 71-73-75-73, Gareth Maybin (NIR) 70-73-76-73, Chris Wood (ENG) 71-73-72-76, Paul Casey (ENG) 72-71-73-76
293 - Damien McGrane (IRE) 70-72-75-76,
294 - Dawie van der Walt (RSA) 68-73-74-79
Withdrew - Jose Maria Olazabal (ESP) 74-70-73-WD