Referee John Schorle stepped in two minutes and 46 seconds into the round as an exhausted Sanders wilted under a barrage of punches from Klitschko.
"I feel a lot of weight off my shoulders. My dream has come true," Klitschko said after securing the title vacated by the retirement of Lennox Lewis.
The 32-year-old Klitschko looked nervous in the first round against the South African southpaw, who had stopped his brother Wladimir last year, and was shaken by a hard left and was hanging on as the round ended.
He quickly regained his composure, however, to dominate the rest of the fight, picking off the South African with accurate left jabs.
Sanders' hopes were raised when a small cut opened over Klitschko's left eye after a wild third round in which the fighters slugged it out toe to toe.
But the 38-year-old South African appeared to tire badly as the fight progressed but fought bravely.
"I was surprised he never went down. He took so many punches it was unbelievable and he always came back with punches of his own," added Klitschko.
Sanders was taken to hospital after the fight to treat a hematoma on his left ear but manager Vernon Smith told reporters that his fighter was in good shape.
"He is fine, he is smiling. We got beaten by a great boxer and that is it," Smith said, noting the fighter was exhausted and agreed with the referee's decision to halt the contest.
All three judges awarded every round but the first to Klitschko.
Lewis, in his last fight before retiring, defeated Klitschko in the same arena, the Staples Center, last year.
Klitschko said Lewis had visited his dressing room after the fight to congratulate him.
"Lennox is a great champion and I would be happy to fight him again and I hope Lennox will come back," he said.
Klitschko also praised the part Wladimir played in his success, saying half his title belt belonged to his brother.
"We split our wins together and we split our losses. If Corrie Sanders beat me it would be a big disaster for the Klitschko brothers," he added.
Sanders was bidding to become the first boxer ever to beat both brothers.
The two brothers have long dreamt of jointly ruling the heavyweight division but Wladimir suffered a major setback two weeks ago in Las Vegas when he lost a bout for the World Boxing Organization heavyweight title to Lamon Brewster.