The 26-year-old, from Bury, Greater Manchester, becomes the third Briton to win one of cycling’s Grand Tour races within the last year.
Team Sky’s Chris Froome is the current holder of the Giro d’Italia winner title and his teammate Geraint Thomas won the Tour de France.
His win is also the fifth consecutive victory for a British cyclist in a Grant Tour event, as Chris Froome was the previous winner of La Vuelta and the Tour.
The Mitchelton-Scott team rider was one minute 46 seconds ahead of his next nearest rival at the end of the 20th stage in Andorra with just one stage to go.
It is tradition that the person ahead as the last stage starts is not challenged.
The overall leader wears a red jersey – the equivalent to the Tour de France’s yellow jersey.
This year’s event covered 3,254km (2,021 miles) and went through many of Spain’s mountain ranges before it arrives in Madrid on Sunday.
Yates has a twin brother Adam, who is also a professional cyclist and was placed fourth overall in the Tour de France in 2016.
Simon Yates also has a good record in the Tour, having come 7th overall in 2017 and taking the white jersey as fastest young rider.
In the Giro d’Italia, Yates held the top spot in the general classification earlier this year before seemingly running out of steam in the race which Froome eventually took.
Yates had previously competed for the British national team, winning a gold in the Track World Championships in 2013 and third overall in the Tour of Britain in the same year it was won by Sir Bradley Wiggins.
In 2016, Yates was banned for four months after committing what the Union Cycliste Internationale called a non-intentional violation of an anti-doping rule.
Cycling News reported that Yates had tested positive for the controlled substance Terbutaline during the Paris-Nice race that year. It is a drug commonly taken for asthma.
The website reported that the doctor on Yates’s then team, Orica-GreenEdge, had made an administrative error by failing to apply for a therapeutic use exemptions (TUE), to treat the rider’s asthma.
Orica-GreenEdge said in a statement at the time that Yates was not to blame, the team took responsibility and it would result in an “unfortunate break” in his racing.
The ban meant Yates missed the 2016 Tour de France.