Despite an error on a triple flip, the 20-year-old triumphed ahead of Belgium's Loena Hendrickx who had started as favourite in the absence of Russia's banned skaters.
"I'm in shock, but the work paid off," said Gubanova, dressed in a bright outfit to resemble a sari, after winning the free program in Espoo, Finland.
She had already won the short program and finished the competition on 199.91 points.
"I was so stressed before skating, and mentally it was very hard," added Gubanova who had represented Russia until 2021.
"At the end of my performance, there were a lot of emotions."
Having finished 11th at the Beijing Olympics then sixth at the world championships last year, Saturday's win was comfortably the biggest of Gubanova's career.
Hendrickx, runner-up at the worlds, had been the favourite to succeed the banned Kamila Valieva as champion.
But the Belgian fell heavily twice on Saturday.
"I'm not happy at all. I wanted to do a good program and I didn't. I'm very disappointed," admitted the 23-year-old.
Hendrickx was more than six points behind the champion while Swiss 16-year-old Kimmy Repond was third with 192.51 points after a faultless routine to music from British rockers Muse.