The Gypsy King produced a stunning uppercut in round six to floor the challenger for the WBC World heavyweight title in front of a record 94,000 crowd.
Whyte got to his feet, but still on unsteady legs, the fight was quickly waved off by referee Mark Lyson.
Fury controlled every moment of a contest that at one stage threatened to be blighted by spoiling, both men getting a telling off in round four.
But when it came to boxing, the Morecambe-based superstar was in a class of his own, keeping Whyte at bay with his left jab and upping the pace as he pleased.
Whyte, cut over his right eye after an accidental clash of heads, was first installed as the WBC’s number one contender nearly four years ago but he was unable to impose himself.
In what was Fury’s first fight on home soil in almost four years, he delighted a partisan home crowd and then reiterated pre-fight comments that he could now retire - something he has said at various stages throughout his career.
“This might be the final curtain for the Gypsy King,” he said.
Fury added: “I am overwhelmed by the support, I can’t believe 94,000 of my countrymen and women came to see me perform.
“Dillian Whyte is a warrior and I believe he will be world champion. But tonight he met one of the greats in the sport.
“There’s no disgrace. He’s a tough, game man – he’s as strong as a bull and he’s got the heart of a lion. But you’re not messing with a mediocre heavyweight, you’re messing with the best man on the planet.”
Then, this being Fury, he serenaded the crowd with a post-fight sing-song of his favourite American Pie, Don McLean having featured in the pre-fight video that accompanied him to the ring.
Now all the talk will be of what’s next, with most hoping Fury hangs around to face the winner of Anthony Joshua’s rematch with Oleksandr Usyk, the Ukrainian being the holder of the other three world titles.
The winner of that fight would be the first undisputed heavyweight champion since Lennox Lewis 20 years ago.