The 28-year-old Portland, Oregon native nabbed the top prize over runner-up Mondo Guerra and third-placed Andy South in tonight's finale.
Singer Jessica Simpson had joined Heidi Klum, Michael Kors and Nina Garcia on the judging panel at Bryant Park.
The collection - entitled 'Running Through Thunder' - was inspired by Jones's journey through the fashion industry and featured earth-toned pieces including long flowing chiffon dresses and pant suits.
Garcia and Klum both agreed that the models looked "sexy and polished" while Kors loved the vibe of the collection, calling it "relaxed and easy". Simpson also said that she would love to wear most of the pieces shown.
"This is crazy! I needed this so bad in so many ways," Jones said, as her family joined her on the runway.
"Now I truly feel as though I'm supposed to be doing what I'm doing. It's the most exciting thing that's ever happened to me."
Jones took home a prize of $100,000 from L'Oréal Paris, an editorial feature in Marie Claire magazine, a $50,000 technology suite and the opportunity to sell her line on Piperlime.com.
Guerra's second placed collection was inspired by his Mexican heritage and dedicated to his "spiritual guide", grandmother Betty.
"I honestly believe that everything happens for a reason. This experience has just proven to me what I am capable of achieving. I started out so insecure and self-doubting," he recalled. "I feel like this has contributed to me as a person and as an artist so much more than I ever expected and that is such a gift."
South's Asian-themed collection came in third place and featured vibrantly coloured silk dresses and blouses inspired by his ethnic background.
"There are no regrets. I presented a collection that I really love and I did that. I set out to present a sophisticated collection and I accomplished that," he said. "From here, the opportunities are endless and it's just the beginning of so many great things."
Before announcing the results, the panel had told the finalists that they were impressed by the contestants' ability to maintain their unique sense of style and were "blown away" by what they'd seen.
Other designers from the season were in the audience at Bryant Park.
Project Runway airs on Lifetime.
> Click here to read our interview with Gretchen Jones
> Click here to read our interview with Mondo and Andy