"This is the dream of my life that's become a reality now, " Sastre told the Associated Press.
The big loser overall was Luxembourg's Frank Schleck, who was caught by his CSC teammate Sastre for three minutes, and slipped from second to sixth overall.
Sastre, who now rides for the newly-formed Cervelo team, has enjoyed a solid year and put in a strong display to finish fourth in May's Giro d'Italia.
Top contenders now include 35-year-old Russian Denis Menchov, a two-time Tour of Spain winner, the Schleck brothers and the 2008 Tour de France winner Carlos Sastre of Spain.
So, with the dramatic backdrop of the Champs Elysees beckoning, Sastre has the yellow jersey, Oscar Freire the green, Bernard Kohl the polka dots, and Andy Schleck the white.
Defending champion Sastre and Riis have gone their separate ways since last year's victory but both men will have high hopes of being top of the podium again in Paris.
CSC's Sastre was protecting a one minute 34 seconds lead over fourth-placed Cadel Evans, a noted specialist against the clock, with other places on the podium also in the balance.
"To me, it's obvious that Astana should have one leader and to me, that leader is Contador, " Riis -- whose CSC team won the race last year with Carlos Sastre -- told reporters.
Realizing the significance of his performance, Sastre punched the air with delight in the closing meters of his ride and he holds a one minute and five seconds advantage over Evans in the overall classification.
Heavy-legged Sastre clambers to the top of the podium flanked by a couple of French beauties and he looks more relieved than joyous as he pulls the maillot jaune over his taut frame once again.
Silence-Lotto leader Evans completed the course in one hour five minutes and 55 seconds for seventh place, but Sastre, going off last man, rode the time trial of his life to concede only 29 seconds to the Australian.
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