The 25-year-old singer triumphed with anthemic number 'Arcade' - which many have compared to Coldplay - raking in an impressive 492 points from the viewer vote and the jury vote combined.
Duncan gave a short speech before performing the song again, in which he dedicated his victory to "dreaming big”.
Grasping his trophy on stage at Expo Tel Aviv in Israel, he said: "Yes, yes! Oh my god! This is to dreaming big. This is to music first always, thank you."
Italy's Mahmood came second with 465 points and Russia's Sergey Lazarev came third with 369 points.
Despite a show-stopping performance, the UK's entrant Michael Rice - who was crowned the winner of the first series of the BBC singing competition 'All Together Now' last year - placed bottom with his song 'Better Than Us' earning him just 16 points.
The evening ended with an epic performance from Madonna, who gave her new 'Madame X' album track 'Future' featuring Quavo its live debut and marked the 30th anniversary of 1989 hit 'Like a Prayer' with a dramatic performance featuring religious imagery and a hooded choir.
Before hitting the stage, the Queen of Pop gave an impassioned speech reminding people to "never underestimate the power of music to bring people together".
She said: "Another really obvious statement is look at all the delegates behind us everybody here is from all over the world, right.
"Some of the counties that I have been privileged enough to visit and experience and the one thing that brings me to those countries and the thing that brings all of these people here tonight is music.
"So let's never underestimate the power of music to bring people together.
"To quote an amazing song [Madonna's 2000 hit 'Music'], 'Music makes the people come together.'"
She added: "I'm bringing the heat tonight!"
Asked what advice she would give the entrants, she said: "The first thing I'd like to say is that you are all winners no matter what happens.
"The reason that I believe that is because to get here where you are right now is not easy, right.
"First you had a dream and you had to believe in that dream and make many sacrifices and give a lot of things up.
"Earn your way to the place you are right now and in my opinion that makes a winner no matter what."
Eurovision Duncan Laurence
Tagged in Eurovision