Tanak went off the road near the end of the opening stage on the final day, meaning he could not catch championship leader Neuville in the overall standings.
Neuville went into the rally with a 25-point lead over his Estonian Hyundai team-mate Tanak, the 2019 world champion.
"Honestly, it came like a surprise," said Neuville, who has finished world championship runner-up five times in his career.
"I don't know what to say at the moment but I think we deserve it. Very challenging year, very tough."
Tanak was leading the rally when he slid off the narrow forest road early in the morning in Japan's central Aichi Prefecture.
He sat stunned alongside co-driver Martin Jarveoja before unbuckling his seatbelt and getting out of the car, which was unable to move.
Both Tanak and Jarveoja were unhurt.
"Caught us by surprise, quite a lot of dirt and understeer and we went off the road. Nothing good," said Tanak.
Neuville's co-driver Martijn Wydaeghe saw the news on his phone and hugged his driver.
The Belgian began the day in seventh place but on course to win the world title after recovering from a disastrous start at the season-ending event.
Tanak, who began the day leading the rally 38 seconds ahead of second-place Elfyn Evans of Britain, needed everything to go his way to snatch the silverware.
"Obviously much more pressure than we needed, especially for this last event," said Neuville.
"We knew there was risk and we managed it. We are happy now, we are a bit more relaxed now, so we can push harder for the manfacturers' because we want to go home with all the trophies."
Tanak's retirement jeapordised Hyundai's chances of winning the manufacturers' championship.
Hyundai went into Rally Japan with a 15-point lead over Toyota.
"There is not much to lose, we will go flat out, go for the manufacturers', everyone wants that title too," said Neuville.
"I will do what I can to make the car faster."
