Sea The Stars has now won six Group One races in a row and, with this victory, establishes himself alongside the likes of Ribot, Sea Bird II and Mill Reef as one of the great Arc victors.
For 50-year-old jockey Kinane, this is his third Arc triumph, following on from his victories on Carroll House 20 years ago and Montjeu 10 years later.
"I ended up in a position I maybe didn't want to, but I didn't want to risk firing him up," said Kinane.
Oxx revels in historic win
"They were going a nice pace and I knew I would need a bit of luck in the straight, no matter what happened, but I knew I had the pace to go anywhere I wanted.
"He's a phenomenal horse."
It is trainer Oxx's second Arc victory after Sinndar's triumph in 2000.
"It's wonderful that it's over - it's just a great relief," said Oxx. "He was in a nice position and he just had to step up the gears a bit to get out.
"Mick would not panic because this horse has the gears."
Sea The Stars fully justified the applause he received on his way out of the paddock from the Parisian crowd with the manner of his victory.
However, for much of the race he was boxed into the inside straight by an 18-strong field with the Aidan O'Brien-trained Set Sail and Grand Ducal setting a generous pace from the off to establish a prominent lead.
Once the gaps finally appeared the race quickly developed and despite an early challenge from French Oaks winner Stacelita, Sea The Stars exhibited an exhilarating turn of foot to scamper clear in the final 200 yards.
Channon delighted with Youmzain second
It was the third year in a row that the six-year-old Youmzain, trained by former England footballer Mick Channon, had to make do with the runner-up's spot.
"I'm very proud of my horse and everyone at West Ilsley has done a tremendous job, he has had a few setbacks this year," said Channon.
"This is his race and we have just got to congratulate Sea The Stars - he's a champion.
"The winner quickened up from a furlong out and put the race to bed, we've chased him and he has run another great race."
Cavalryman races in Godolphin's French colours but he will sport the famous royal blue silks next term.
Racing manager Simon Crisford said: "It was a fantastic run, we are delighted and the winner was magnificent.
"He will definitely stay in training next year and he will go to Dubai and be back in Newmarket running in the blue colours next year."
Although fourth-placed Conduit failed to give Sir Michael Stoute a first victory in the Arc, the Newmarket handler was not too disheartened.
"The champion beat everyone again but we are delighted with his run, and the Breeders' Cup is on the agenda again, provided he comes out OK," he said.
PREVIOUS GREAT ARC WINNERS
RIBOT (1956):Won second successive Arc by six lengths against a 19-strong field
SEA-BIRD II (1965): Destroyed previously unbeaten Reliance II by six lengths
VAGUELY NOBLE (1968): Surged to front over two furlongs out before galloping all the way to line to beat Sir Ivor by three lengths
DANCING BRAVE (1986): Produced devastating final furlong to beat strong field by a length and a-half in record time
PEINTRE CELEBRE (1997): Caught leading group with furlong and a half to go before clinching victory by five lengths
MONTJEU (1999): Five lengths down off the home bend, Kinane's colt caught El Condor Pasa 75 yards out for a half-length win
ZARKAVA (2008): With plenty to do after dropping back early on, the filly accelerated into a gap and stormed home
A slight disappointment in the race was Irish Derby winner Fame And Glory, who finished sixth.
"He ran well and I'm not sure what we will do now," said trainer O'Brien. "Sea The Stars is a great horse and an absolute credit to John Oxx."
Sea The Stars' unbeaten run began in May when he scorched to victory in the 2000 Guineas at Newmarket, a triumph he followed up with by clinching the Epsom Derby, making him the first horse to win this race double since Nashwan 20 years ago.
The Coral-Eclipse soon followed, after which he headed to York for the Juddmonte International.
It was a similar outcome on the Knavesmire as he defeated Mastercraftsman by a length.
Next up was the Irish Champion Stakes at Leopardstown, where he produced a clinical performance in dispatching the challenge of Fame And Glory.
Some observers gave the colt a £100m stud value, though neither Oxx nor the horse's Hong Kong-based owner Christopher Tsui have yet confirmed whether Sea The Stars will be retired after this season.
1 Sea The Stars (M Kinane) 4-6 f 2 Youmzain (K Fallon) 20-1 3 Cavalryman (L Dettori) 12-1 Dist: 19 ran. Distances: 2l, head
Flashback to June 2009 Sea The Stars seals Guineas-Derby double
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