Coach Nikos Nioplias's side went into their penultimate Super League match six points clear of arch rivals Olympiakos Piraeus and needing to avoid defeat to secure their 20th championship.
Panathinaikos made a perfect start at the Olympic Stadium when France striker Djibril Cisse converted Sebastian Leto's headed pass in the first minute for his 29th goal of the season.
Young Greek Sotiris Ninis made it 2-0 on the stroke of half time with a stunning volley from the edge of the penalty area.
"Today is a day of joy for myself and the whole club. When you have good players your dreams can be realised," Nioplias told reporters.
"Our big target was the league title. We also want to win the cup but the championship is what gives the prestige and the opportunity to play in the Champions League."
JUBILANT SCENES
The final whistle was greeted by jubilant scenes among the 60,000 crowd who last saw Panathinaikos claim the championship in the double-winning season of 2004.
Panathinaikos can go on to land their eighth league and cup double when they play Aris Salonika in the Greek Cup final on April 24.
Deposed champions Olympiakos, who had claimed 12 of the last 13 league titles, won 2-0 at relegated Panthrakikos thanks to first-half goals from Vasilis Torosidis and Kostas Mitroglou.
"The title belongs to our supporters who have lived through strange times in recent years," said Panathinaikos president Nikos Pateras referring to the remarkable dominance of Olympiakos.
"I would like to thank them for the backing they have given the coach and the management from the start of the season. Without them we would not have been able to win the championship."
Olympiakos will be joined by PAOK Salonika, AEK Athens and Aris in the end of season playoffs, a mini-league competition between the teams placed second to fifth which determines who will take the Champions League qualifying berth.
