His victory brings Team GB's tally to 22 gold, 13 silver and 13 bronze - making this the most successful Games in terms of gold medals since the London Olympics of 1908 and equalling the total number of medals won in Beijing.
Sir Chris's latest triumph has taken him to six gold medals - one more than rower Sir Steve Redgrave.
The Scot held the Union flag over his head after his keirin victory - his second gold medal of London 2012 after also winning the team sprint.
"I am in shock. This is just surreal," he said.
The cyclist has seven Olympic medals in total, with one silver accompanying his golds.
Sir Chris first became Olympic champion in Athens in 2004, with victory in the 1km time-trial, before claiming a hat-trick of victories in Beijing and the team sprint title on Thursday.
"This has really turned into a golden summer for Team GB and for the whole of the UK," Prime Minister David Cameron said.
"Our athletes, both individually and as a team, can be incredibly proud of what they have achieved.
"The whole country can be very proud of putting on such an incredible set of Games and such a great show for the whole world."
Britain's best-ever Olympics were the London Games of 1908 when it claimed an unsurpassable 146 medals - 56 golds, 51 silvers and 39 bronze.
Sir Chris's gold was the second of the day for the British cycling team after Laura Trott, 20, claimed her second gold medal of the Games by winning the women's omnium just an hour earlier.
Trott finished just one point ahead of American Sarah Hammer, with Australian Annette Edmondson taking the bronze. It was the sixth gold medal in eight events for Britain in the London Velodrome.
Trott said: "I can't believe this is happening to me, I really can't. I am so happy."
But the outgoing face of British cycling Victoria Pendleton, 31, could only manage a silver in her sprint showdown with Australian arch-rival Anna Meares.
Earlier, the Team GB gold rush continued as the dressage team trotted to a historic victory over Germany.
Team dressage has been dominated by Germany in every Games since 1984 - but the magic of London 2012 meant that this was yet another bastion to fall to an apparently unstoppable Team GB.
The team of Carl Hester, Laura Bechtolsheimer and Charlotte Dujardin put in an exquisite performance in this most rarefied of equine sports.
The gold is a career-crowning moment for veteran rider Hester, 45, who has now contested four Olympics.
He said: "We've done what we've wanted to do, it's been a very stressful time for me through this whole thing."
Earlier, Team GB equalled its gold medal haul from Beijing when the Brownlee brothers both claimed medals in the triathlon.
His younger brother Jonny's won bronze in the same race.
Britain had never won a triathlon medal before but Alistair Brownlee was favourite, having dominated triathlon over the last four years.
And there was further success for Team GB in Weymouth as Nick Dempsey took silver in the men's windsurfing and Robbie Grabarz claimed bronze - shared with two other athletes - in the high jump.
