COLOGNE, June 29, 2014 (AFP) - The 31-year old Asuncion-born player posted a final round 65 to join Stenson (67), Frenchman Gregory Havret (66) and Spain's Rafa Cabrera-Bello (67) in the play-off in the 2million euros event on the Gut Larcenhof course.
After Havret dropped out at the second extra hole, the current 305th world ranked Zanotti, competing in his 180th Tour event, matched the birdies of Stenson and Cabrera-Bello at the third extra hole when rain began falling heavily.
Stenson and Cabrera-Bello were then in rough off the tee at the fourth extra hole, the par four 18th, with the Spaniard dropping out after finding water guarding the green with his second shot.
Stenson was forced to lay-up short of the green before then matching Zanotti's par.
However, Stenson then found the water with his tee shot at the fifth extra hole, the shortened par four 17th, with Zanotti laying-up with the aim of getting a par.
Zanotti then created European Tour history when Stenson, who found a bunker with his third shot, conceded victory after failing to sink his next shot.
A delighted Zonitti, who lost his playing card last season but regained it last November by finishing second at the Tour School, was doused in champagne ahead of being handed a first prize cheque for 333,330 euros.
"I feel very, very happy and it is a moment I've been waiting for a long time," he said
"I have worked hard, and I am very happy. I am happy too for my wife, Lucia who was here to see my first win and to my coach, and also to my sports psychologist Patricia Fuentes.
"This win also will be huge in Paraguay, as everybody is going to be very happy for me. Everyone was expecting a lot from me in Paraguay, so this win is going to be great for Paraguay that only has five golf courses in all the country."
Victory also earned Zanotti a two-year Tour exemption along with a start in August's Bridgestone Invitational and next year's European Tour Volvo Champions.
Stenson's only comfort is that he has inched closer to world number one Adam Scott and with both players now not competing before the July 17 commencing (British) Open it means Stenson will have another chance of going past the Australian and become the first-ever Swede to top the rankings.
And despite missing out on victory, Cabrera-Bello along with fellow Spaniard Pablo Larrazabal, Ireland's Shane Lowry and South African George Coetzee have qualified for the British Open off a 'mini' Tour money list concluding in Cologne.
England's James Heath was also celebrating in being handed the keys to a gleaming 160,000 euros BMW i8 sports coupe after a hole-in-one at the par three 16th.
It is London golfer's first Tour hole-in-one and he said the 15th in his career but strangely just the first time he's won any prize.
Leading final scores in the EPGA BMW International Open at the par-72 Gut-Larcenhof course in Cologne on Sunday (GBR and IRL unless noted):
269 - Fabrizio Zanotti (PAR) 72 67 65 65 (Won at the fifth play-off hole), Rafael Cabrera Bello (ESP) 64 68 70 67, Henrik Stenson (SWE) 68 68 66 67, Gregory Havret (FRA 71 65 67 66
270 - Jamie Donaldson 71 67 65 67, Simon Dyson 69 66 69 66, Thongchai Jaidee (THA) 71 66 68 65
271 - Emiliano Grillo (ARG) 66 66 70 69, Thomas Bjorn (DEN) 70 66 66 69, Danny Willett 64 68 71 68, Pablo Larrazabal (ESP) 69 63 67 72
272 - Francesco Molinari (ITA) 71 66 65 70, Paul Waring 72 63 69 68, Oliver Fisher 72 66 65 69, Alex Cejka (GER) 68 66 69 69, Anthony Wall 69 69 68 66, Romain Wattel (FRA) 67 68 69 68, Sergio Garcia (ESP) 71 66 70 65, Shane Lowry 67 68 70 67, Richard Green (AUS) 72 68 62 70, Alexander Levy (FRA) 70 67 66 69
273 - Robert Karlsson (SWE) 68 66 68 71, Paul Casey 73 67 63 70, Tyrrell Hatton 69 67 70 67, Anders Hansen (DEN) 66 72 67 68, Mark Foster 70 69 65 69, Michael Hoey 66 69 69 69
274 - Matthew Nixon 69 67 69 69, Branden Grace (RSA) 67 67 74 66, Jens Dantorp (SWE) 68 68 67 71
275 - Eddie Pepperell 72 64 72 67, Julien Quesne (FRA) 71 68 69 67