The Italian, looking to become the sixth man to win all three grand tours, snatched his fourth stage win by easing away early in the final ascent to Hautacam, a 13.6-km climb at an average gradient of 7.8%.
France's Thibaut Pinot was second, 1min 10sec behind, and Poland's Rafal Majka finished third, two seconds further back, and secured the polka dot jersey for the mountain classification.
Pinot is now second overall, 7min 10sec behind Nibali with another Frenchman, Jean-Christophe Peraud, in third at 7:23 off the pace. Spain's Alejandro Valverde could not respond to Pinot's attack and slipped to fourth overall.
"We worked to control the breakaway. I felt very well but I did not remember it was so hard in the final part of the climb," said Nibali.
"Vincenzo wanted to show he is the boss. He finished it off nicely," said Astana team manager Alexandre Vinokourov.
Only a crash or a disaster in tomorrow's final time trial can prevent Nibali from adding to his 2010 Vuelta and 2013 Giro d'Italia titles. Pinot, Peraud and Valverde are likely to fight for the remaining places on the podium.
"Second place is only provisional, I can still finish just outside of the podium," said 24-year-old Pinot, who already has two top-10 finishes in grand tours.
Nibali's only scare in the 18th stage, a 145.5-km trek from Pau, came when he hit a careless spectator midway through the final ascent.
France's Blel Kadri and Spain's Mikel Nieve were the strongest of the morning's breakaway and reached the foot of Hautacam with a 1:30 lead, but it was never going to be enough.
Earlier, Valverde went ahead in the descent from the iconic Col du Tourmalet, but he was reined in by the end of the descent as the favourites regrouped. One of Valverde's Movistar team-mates was disqualified for taking shelter behind his team car too often.
Nieve dropped Kadri early in the climb and Nibali started his show, joining American veteran Chris Horner on the attack before leaving the Vuelta champion behind. He sped past Nieve and never looked back.
Pinot's attack in the chasing group left Valverde stuck on the tarmac as the Frenchman was followed by Peraud and Van Garderen. Valverde rode himself into the ground to limit the damage, finishing the stage in 10th place, 49 seconds behind Pinot, who, barring a crash, should secure the white jersey for the best Under-25 rider.
"Tonight I am very, very tired. I rode to the limit," said Valverde, whose experience in the last couple of days helped him limit the losses.
"If I have good legs for the time trial I can regain the second place," the Spanish time-trial champion, added.
Peraud, who like Valverde is also a decent time-trialist, although he has not excelled in the discipline recently, was satisfied he did not lose too much time on Pinot.
"Nothing is done yet. With the fatigue in the third week, nobody can be assured of the podium," he said.