The British pair defeated the Chinese duo by the most slender of margins, getting just 1.23 points more than the World Champions over the course of six rounds, while the Russian Olympic Committee finished third.
Daley, 27, has won gold at the fourth time of asking, having represented Team GB at Beijing, London and Rio de Janeiro, whereas Matty Lee has taken top spot in his first Olympics.
It is Daley’s third Olympic medal after he collected bronze at the past two Games.
Daley was left in shock by the success in Japan, he told BBC: “I mean to finally have this gold medal around my neck after so many – I mean I’ve been diving now for 20 years and this is my fourth Olympic Games and lots of people probably would have counted me out of this Olympics being the older person but I’m in the best shape physically and mentally.
Daley's husband and mother celebrate his victory in Canada
“With the support of Matty coming into this competition and the way that we’ve been preparing, I think we’ve just had that unstoppable mentality this year and this is the first year that I’ve ever been able to think like that – that we are the ones to beat.
Daley laments that his father, who died from brain cancer in 2011, never got to see him win an Olympic medal
“I still honestly can’t believe what’s happening and I honestly didn’t think I would get there in the first place, but here we are.”
The pair started well after an inward one-and-a-half somersault pike in the opening round and maintained their form to lead with two rounds left.
China’s poor dive – a score of 73.44 points was ranked sixth in the fourth round – left the route to gold open for Daley and Lee.
They scored 93.96 in the fourth round with an impressive backwards three-and-a-half somersaults pike to take charge.
A fifth dive – a reverse three-and-a-half somersaults tuck – earned 89.76 points to put the pressure on China ahead of the final round.
The British pair were 1.74 points ahead and an impressive forward four-and-half somersault tuck earned them 101.01 points and China could not catch them with their final effort.
After winning gold Daley said: “You want to win an Olympic gold medal but never think you actually will. I will carry on but I will definitely take a break. There are some beverages with my name on it to celebrate with my husband and family.
Lee explains that as a child, he was a big fan of Daley. They first met when Lee approached Daley for photos and a autograph.
“This means an incredible amount. All athletes put in such hard work and dedication into our performances. To be an Olympic champion after four attempts at it feels extremely special.”
Lee added: “In 2018 I moved my whole life to London from Leeds, I had nothing really in London. Our aim was to get an Olympic medal and for it to go the way we wanted it to is awesome.
“I owe a lot to Tom because he has taught me a lot.”