Nieland also managed 80.06m in the final round and was the only competitor to throw over 80m.
"It feels great," said the veteran of three Olympic Games. "I'm in the best shape of my life, so age is irrelevant.
"I've got Steve Backley coaching me and he's picked up on a few things in my technique. I think he made some money on me tonight!
"It's the first time in my life I feel I can make things happen. I think before my technique was a bit hit-and-miss.
"It's a lot more stable now and the sky's the limit as far as I'm concerned."
Idowu, for so long in the shadow of world record holder and compatriot Edwards, destroyed the field with his first-round jump.
Khotso Mokoena of South Africa took the silver with a leap of 16.95 and Australian Alwyn Jones claimed bronze with 16.75.
Idowu's gold help to make up for his disappointing 2004 Olympics in Athens when he failed to register a valid jump.
"It was emotional out there," he admitted. "The last two years have been a struggle.
"All the work I've done has paid off. I've got my medal and I hope it's the start of many things to come."