Haneke joins an elite group of two-time winners at the world's biggest film festival after his "The White Ribbon" won in 2009.
The simple yet moving tale set almost entirely inside a Paris apartment left audiences in tears in Cannes, and it will prove a popular winner for a director considered one of the greatest working in Europe today.
Love also won plaudits for its two main actors, Jean-Louis Trintignant and Emmanuelle Riva, who are both in their 80s.
"A very, very big thanks to my actors who have made this film. It's their film. They are the essence of this film," Haneke told a packed audience at the closing ceremony after being applauded and cheered.
Critics were almost unanimous in their praise for Love.
"Whatever his message, the spell of this incandescent film will be an elevating memory," Mary Corliss wrote in Time Magazine. "In the history of movies about love, Amour lasts forever."
The glamorous red carpet awards, held amid thunder, lightning and pouring rain on the French Riviera, brought to an end a 12-day blur of screenings, photo shoots, parties and deal making.
"It's raining a little bit," deadpanned "The Artist" actor Jean Dujardin, wiping his soaking forehead as he entered the theatre after signing autographs.
The Grand Prix runner-up prize was awarded to "Reality", Matteo Garrone's examination of society's obsession with celebrity and reality television.
British director Ken Loach won the Jury Prize, or third prize, for his charming Scottish whisky caper "The Angels' Share".
Mexico's Carlos Reygadas won the best director award for "Post Tenebras Lux", a dreamlike exploration of the undercurrent of menace within Mexican society today.
Romania's Cristian Mungiu picked up the screenplay honor for "Beyond the Hills" about a real-life exorcism gone wrong, and his two young stars, Cristina Flutur and Cosmina Stratan, shared the best actress award.
Danish star Mads Mikkelsen was a popular winner of the best actor prize for his portrayal of a man wrongly accused of child abuse in the harrowing drama "The Hunt".
On the sodden red carpet leading into the Grand Theatre Lumiere theatre, the cast and crew of "Therese Desqueyroux" braved the rain for the world premiere of this year's closing film.
Annie Miller, the wife of the late director Claude Miller who was finishing the film when he died, was in floods of tears as she walked up the stairs and turned to face the ranks of photographers and cameramen.
The stars came out in force in Cannes this year, underlining the festival's ability to attract big names as well as showcase low-budget movies that otherwise might struggle to find an audience.
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