Starring French acting legend Jean-Louis Trintignant, the French-language film beat 21 other movies to claim Cannes gold for Haneke three years after he won with "The White Ribbon" set on the eve of World War I.
Danish heart-throb Mads Mikkelsen took the best actor prize for his role in the taut psychological thriller "The Hunt".
Italian jury head Nanni Moretti and his eight-strong panel handed the prestigious award to Mikkelsen for his turn as a man who watches his life unravel after he is falsely accused of molesting a child.
Two Romanian actresses shared the best actress prize for their roles as best friends, a nun and the victim of a deadly "exorcism", in Cristian Mungiu's "Beyond the Hills".
Cosmina Stratan and Cristina Flutur appear in the harrowing picture by the director who captured the Palme d'Or in 2007 for the Communist-era abortion drama "4 Years, 3 Months and 2 Days".
He also won the screenplay prize this year.
An Italian tragicomedy starring a jailed former mafia hitman as a man driven mad by a quest to become a reality TV star, directed by Matteo Garrone, won the runner-up prize.
In "Reality", the director, who captured the festival's same Grand Prix runner-up award in 2008 for "Gomorrah" about the mafia's grip on southern Italy, tells the story of a fishmonger who dreams of joining the "Big Brother" franchise.
Mexican Carlos Reygadas took best director award for his baffling family drama "Post Tenebras Lux".
The movie, whose Latin title means "after darkness, light" and derives from the biblical Book of Job, is the fourth of the director's works to get an outing at Cannes.
Cannes veteran Ken Loach took the third place Jury Prize award for his kilts-and-whisky comedy "The Angel's Share", six years after the Briton won the Palme d'Or top prize.
The 75-year-old, who was awarded the Palme in 2006 for "The Wind That Shakes the Barley" about Ireland's independence struggle, was back in Cannes this year with a film in competition for a record 11th time.
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