The 32-year-old avenged last August's shock defeat to the Russian by sending him to the canvas in the fourth round.
Whyte controlled the fight from the outset and finished his opponent off with a devastating left hook. The Jamaica-born boxer also improved his record to 30 fights, 28 wins, 19 by knockout and two defeats.
A delighted Whyte told Sky Sports: "I am just sad I didn't get it finished in the first round. He is a tough guy but I felt I could have finished it early.
"I am ready to fight again. If he wants a rematch. I am annoyed I lost the first time.
"I believe I can beat anyone. This camp was a bit annoying because of the reschedule. I was in much better shape than this.
"I want the world title!"
With the world title fight between Anthony Joshua and Tyson Fury still awaiting confirmation of the venue it may be a while before Whyte can challenge for the gold.
Promoter Eddie Hearn also told Sky Sports: "There was a lot of talk about his career being on the line tonight. It was wild in here tonight, so good to see fans in Gibraltar.
"He wanted the energy, his world championship dreams were on the line tonight. It was a lot of pressure tonight.
"The ultimate aim has been for Whyte to challenge for the world heavyweight title. Tonight was about getting his career back on track.
"Coming back from the knockout was not easy. We are back where we wanted to be, we go again and the goal remains the same - to have a shot at the world heavyweight title. I hope the WBC make him mandatory immediately and we move forward."
Earlier in the day, Fabio Wardley earned a knockout victory over veteran Eric Molina to maintain his perfect professional record.
Ted Cheeseman also enjoyed a great night having regained his British light-middleweight title. The 25-year-old knocked out James Metcalf in the 11th round to claim his second successive win.
This was also an emotional night for Ricky Hatton as he watched his son make his professional debut. Campbell Hatton picked up a comfortable points victory over Spaniard, Jesus Ruiz.