Gough kicked away from the break in the last 500m to take the stage on the Te Anau waterfront.
The 148.79km race started at Riverton, taking in Colac Bay, Orepuki, Tuatapere, Clifden, the Blackmount Hill and Manapouri on a day when rain stayed away.
Gough, riding for Kia Motors-Ascot Park Hotel, said a fast peloton prevented any fragmentation in the first hour when they covered 60km.
Several bantam attacks were launched to break away but to no avail.
A five-rider break - including Gough, Luke MacPherson (H&J Smiths Outdoor World) and king-of-the-mountain leader Thomas Stewart (Team Cromwell) and tour leader Ben Hill (MCG) - eventually broke free to slave for each other.
"With about 25km to go other guys joined in to make it a group of seven," said Gough of the peloton which had split on the climb.
A 24-strong group of chasers, including Hill, pumped their legs furiously to catch the leaders, as the peloton re-formed close behind. Macpherson and Gough led towards Manapouri before the other break riders found their second wind.
The gap had been diminishing since Blackmount Hill and got to 23 seconds before the breakaway got back together to open the gap again.
The chasers and peloton got together in the last 10km but left their chase too late.
Gough peeled off about 1.5km from the finish line to hold on to victory.
Briton Stewart, Reon Nolan (MGH), MacPherson and Morgan Smith (BSB) all came in at the same time in that order.
Australian Hill led the peloton across the line 20 seconds later to retain his yellow jersey while Macpherson's kept the most combative jersey, an honour he secured in the first stage.
Stewart consolidated his lead in the KOM jersey.
Gough was last year part of the Kiwi Velo team who won the yellow jersey with James Oram, of North Shore, spearheading the attack.
The Bay rider switched allegiances because Kiwi Velo didn't return this year.
"Today I was kind of the leading rider helping Mike Northey but I just got away as part of a tactical move," Gough explained, delighted his teammates could sit back yesterday before today's longest stage of the tour, the 186.79km grind from Te Anau before finishing at Coronet Peak with an 8km climb.
Gough lauded his coach, former tour stalwart Jeremy Vennell, of Hastings, for his tips.
Fourth in the sprints, Gough said his team were focusing on the general classification and stage wins with Northey and Commonwealth Games rider Tom Sculley to spearhead the collective.
His cousin, Regan Gough (H&J Smiths), 18, of Waipukurau, seems to have recovered from strep throat.
"We catch up in the bunch and wind each other up."