The much-anticipated rematch had been branded Unfinished Business after Froch's controversial stoppage win in nine rounds last November.
But there was no doubting the result this time with Froch landing a straight right hand in the eighth that sent Groves crumbling to the canvas with 26 seconds left in the round.
Team Groves had predicted a fast start in the build-up with the Hammersmith fighter having sent Froch to the canvas inside the opening three minutes of their first fight.
But Groves was more cautious than predicted, working off his jab to keep the Cobra at bay.
Froch started to find his way back into the fight from the fifth, muscling Groves onto the ropes with body shots.
And there was no coming back for Groves when Froch finally found his target with American referee Charlie Fitch waving off the contest.
The action packed undercard featured knockout victories for all Britain's fighters.
London 2012 gold medallist Anthony Joshua won inside a round in his Heavyweight contest while James DeGale scored a fourth round stoppage in his Super-Middleweight contest against Brandon Gonzales.
Jamie McDonnell picked his second world title at Super-Bantamweight with a tenth round knock out of Thailand's TabtimDaeng Na Rachawat.
Essex lightweight Kevin Mitchell stopped Ghislain Maduma in eleven rounds to set up a world title shot later this year.
DeGale's win means that he is now mandatory challenger for Froch's IBF title.
