The pop princess, one of Australia's best-known figures around the world, began with the song which arguably helped relaunch her career, Spinning Around.
She started her performance after Prince Edward, the Earl of Wessex - in his capacity as a representative of the Head of the Commonwealth, the Queen - formally declared the Games closed.
Kylie was followed by Scottish singer Dougie MacLean performing Caledonia.
Dougie was then joined on stage by both Lulu and Kylie and they brought the ceremony to a close singing Auld Lang Syne.
Earlier President of the Commonwealth Games Federation Prince Imran had branded Glasgow 2014 the best Commonwealth Games ever.
He told Glasweigans the city was "pure, dead, brilliant" during his speech.
Prince Imran said: "The Games have made us all very proud and truly brought our family together.
"Scotland, and Glasgow, you really have delivered in every aspect the best Games ever.
"I hope you enjoy tonight's closing ceremony and as we say farewell until we all meet once more on the Gold Coast, Australia, in 2018.
"Glasgow - you were Pure, Dead Brilliant."
He thanked everyone involved alongside Lord Robert Smith who is Chairman of the Commonwealth Games Organising Committee.
Glasgow Lord Provost Sadie Sadie Docherty then officially handed over the Commonwealth Games flag to representatives from Gold Coast in Australia who will host the next Commonwealth Games.
Lulu had started Glasgow's music festival-style Commonwealth Games closing ceremony with a rendition of her classic Shout.
Before she began belting out her most well-known track she said "tonight is all about saying thank-you" and introduced the athletes of the Commonwealth Games.
The athletes joined a host of dancers bopping around a colourful host of pop-up tents, designed to give that festival feeling.
Sally-Ann Kimmince tweeted: "trust Scotland to finish the commonwealth games with 1 big party get on lulu."
Lulu was then followed by Deacon Blue who got the crowd going with their hit dignity.
Lead singer Ricky Ross got the crowds joining in as he belted out the song which tells the story of the dreams of a local council worker.
All in all, some 220 members of the emergency services and various council services took centre stage during the ceremony.
The workers - some on foot and some in the vehicles they use day-to-day - were led into the arena by police outriders who had taken part in the baton relay and held aloft a "Let Glasgow Flourish" banner. The slogan, a traditional Glaswegian phrase, was inscribed on a banner printed at the Glasgow School of Art and was carried by students who lost work in May's devastating fire at the Mackintosh building.
The many thousands of volunteers who helped make the Games a reality were the next to be thanked in the closing ceremony.
Local synth-pop trio Prides introduced the Games volunteers - known as Clyde-siders - and performed their song Messiah.
While they performed dancers lifted and spun with the pop-up tents.
This section of the performance recieved a mixed response on social meida.
Helena Pomfret tweeted: "What on earth are they doing with the tents?!"
Siobhan Harnedy added: "This is shocking #CommonwealthGames #closingceremony"
However, they got the party started prior to the speeches, official handover and performances from Gold Coast singer Jessica Mauboy, all ahead of Kylie's spectacular set.