The 23-year-old former waiter from Bromley, Kent beat Finnish finalist Saara Aalto with a series of brilliant vocal performances.
Afterwards using one of his mentor Nicole Scherzinger’s catchphrases he said: “I can’t believe it, this is surreal. It’s amazing… schamazing!
“Winning will change my life, it’s something I’ve wanted since I can remember. I’ve always known I wanted to sing but it’s only since getting on the X Factor I’ve wanted it so much. It will be life changing, it won’t just change my life but my family’s too.
“To be able to sing every day, make music and work with incredible people is a dream come true.”
After winning, Matt Terry collapsed to the floor and said: "Oh my god."
He then began crying and added: "Thank you so much everybody."
Matt then lifted up and hugged his mentor Nicole Scherzinger.
Simon Cowell said to both finalists: "You came into the final as good artists and ended it as great artists. What I promise you Matt is we will give you 100 percent. Saara you were incredible too."
Runner up Saara said: "I'm so pleased for Matt, congratulations I love you."
A total of 6.4million votes were cast in the final.
Earlier in the contest Matt wept on stage as he saw messages of support from his family including his parents.