The players returned to the 18th for the first play-off hole and Woods missed from seven feet for a winning birdie, meaning the makeshift hole from the putting green to the 18th was required.
Woods also had to scramble for par after a wayward drive on the next before producing the first moment of quality of the day, a superb wedge from 107 yards setting up a conceded birdie which was matched by Mickelson.
He called the victory "very special". It is not yet known if viewers who paid for the event would be credited.
"What a match it was", Mickelson said. "I will bring it up every time I see you".
"You've been doing that to me for 20 years, I don't know why I am surprised now, " he said. "It's nice to have a little something on you". Woods had to sit there and take it.
Phil didn't completely botch the hole - he had a flawless opportunity to win the bet. but when he hit the putt that woulda given him the birdy, it stopped short. It took four extra holes for Mickelson to emerge victorious.
"So that was an opportunity that went wasted, and Phil capitalized on it". Mickelson won the match play event in 22 holes (in the dark!), and he took home $9 million for his efforts. Not one to back down, Woods upped the ante and suggested the stake should be $200,000.
Woods hit his third shot to just over five feet, giving Mickelson his first crack at a winning putt.
Mickelson shot a contrived 93-yard par 3 on 22nd hole that included a tee box set on the practice green so lights could be set up for the players, CBS Sports reports.
Woods and Mickelson made eight different side bets against one another within the match.
They played the hole again as sunlight diminished, and Mickelson's approach shot went in a bunker.
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Oil prices are nearly a quarter below their recent peaks in early October, weighed down by surging supply, especially from the US. US West Texas Intermediate ( WTI) crude futures ended the session down US$3.77, or 6.6 per cent, at US$53.43 per barrel.
Woods missed his 8-foot birdie effort for the huge payday.
No player ever led by more than 1 hole.
But for there to be long-term success, such an event needs Tiger and Phil to be. well, Tiger and Phil.
Tiger smirked and commented, "That hurts the pocket".
Mickelson won three holes in regulation with pars.
Woods won $200,000 on the first hole when Mickelson missed his birdie putt, but Mickelson swept three "closest to the pin" wagers on par 3s for a total of $600,000.
Instead, Mickelson and Woods shared stories, complimented each other, laughed like long-lost friends and made side bets for eye-popping sums.
Woods said he enjoyed the match, even if he was on the losing end.
Mickelson walked up the fairway knowing that if he made birdie and Woods made par the cash grab would be his.