Philbin recalled his career troubles prior to hosting the morning show and expressed gratitude to the Live! staff for helping him achieve success, saying: "This is the last chance I had in this business to make in here in New York.
"I came back a little late in my life to make it all work... 28 and a half years, and we've had a great time."
He added: "I wanted this to be a show where people would feel better about themselves, would look at life in maybe a different way, a funnier way. I think that's what we've accomplished ... I'm going out a pretty proud and happy guy."
His most sincere thanks, he said, went to the many fans who have sent him well-wishes ever since he announced his plans to depart Live! earlier this year.
"I'll never be able to answer all the cards and messages, especially in the last few weeks," Philbin said. "Thank you very much for these years together. God bless you all, and I hope I see you again real soon."
Live! co-host Kelly Ripa praised Philbin for his support during her ten years on the morning programme, recalling that he patiently helped her to learn the format of morning television.
"I've had the privilege of walking 43 steps with you from my dressing room to the studio floor, five days a week... except when you have off on Fridays, and Fridays and Mondays in the summer," Ripa teased.
The studio audience for Philbin's final telecast was filled with the presenter's family and famous friends including Katie Couric, Diane Sawyer and Donald Trump.
A choir performed a musical salute to Philbin's career with a personalized version of 'Seasons of Love' from the Broadway musical Rent.
"995,600 minutes - how do you measure a man and his career?" they sang.
New York City Mayor Michael Bloomberg was also on hand to thank the host for his dedication to the city.
Bloomberg told Philbin: "You have been New York City's biggest fan, and New York feels the same way about you. Whatever you do, I hope you do it in New York City."
Justin Timberlake, Selena Gomez, Anne Hathaway, Emma Stone and Neil Patrick Harris all appeared in taped segments recalling their favourite Live! moments.
Philbin and original co-host Cyndy Garvey presented the very first edition of Live!, originally called The Morning Show on April 4, 1983.
Kathie Lee Gifford joined the series in 1985 and with Philbin formed one of the most successful and long-lasting on-air partnerships in daytime television history.
In 2000, Gifford's exit from the series after 15 years prompted a nationwide search for Philbin's new co-host. Ripa emerged as the audience favourite among a revolving group of co-hosts, officially joining the series on February 5, 2001.
Earlier this year, Philbin drew tributes from fans and friends when he announced his plans to depart Live!.