The 43-year-old, who had promised to strip off if he won, beat Scotland's John Higgins 18-16 in a dramatic final to become the event's oldest victor for 40 years. However, Williams pulled through and won 18-16 by the end of the match.
Mark Williams proved to be a man of his word, stripping off for the post final press conference, after the Welsh man landed his third world title.
Williams won seven consecutive frames from 7-7 to lead 14-7, and despite a rally from Higgins to 15-15 he closed out victory in the 34th frame, in the closest final since 2005. He said of his family, during this year's tournament: "I'm sure they've enjoyed it".
Having finished runner-up to Selby previous year, Higgins becomes the first player to lose back-to-back finals since Jimmy White lost five in a row from 1990-94.
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Sunday's 118-92 loss was one of New Orleans' poorest outings of the entire season, particularly at the offensive end. Ray Brewer won back-to-back titles in the 2015-16 and 2016-17 seasons, after Taylor Bern prevailed in 2014-15.
The 43-year-old didn't even appear at the World Championship last year and had contemplated retiring from snooker following a lack of form.
"Last year I watched this in a caravan having some beers".
"12 months ago I wasn't even here". Where has it come from?
"I was thinking, 'I'm not going to get over the line here.' I knew if I didn't get enough he was going to clear up again, but I'm over the moon". I've just done something I never thought I would.
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But pressed on whether the horse has what it takes to complete a Triple Crown sweep, Baffert adopted a more conservative mood. Because it is so hard to predict five straight winners, Pick 5 bettors usually take home large jackpots.
The title earned him a total of 425,000 pounds, bringing his total for the season to 885,400 pounds.
He's done it! @markwil147 wins the World Championship for a third time after a truly epic match with John Higgins... Higgins, who lost to Selby in last year's final, pocketed 180,000 pounds.
'If I won this again next year, I'd do this again - I'd cartwheel round here naked. Williams nearly quit the sport last summer after a decade of poor form, and failing even to qualify for the blue-riband tournament.
Having then lost eight of the previous nine frames, the world No 7 could have crumbled but instead he grittily made contributions of 41 and 33 to move back ahead at 16-15 before nervelessly edging within one of victory thanks to a break of 100.
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A number of Israeli dignitaries are also expected to attend the festive event in Jerusalem's Arnona neighborhood at the building now housing the USA consulate.
Williams went into the final on the back of a tardy finish to his tense semi-final win over Barry Hawkins on Saturday followed by a visit to a kebab house at 0130 GMT.