Institute led through two quick goals midway through the first half scored by Niall Grace and Stephen Curry.
A fine strike by Conor McMenamin pulled one back and Town's top scorer Stephen Murray equalised with a lob over keeper Marty Gallagher on 40 minutes.
Murray netted the winner in the 65th minute for Matt Tipton's side.
Warrenpoint were relegated last season after a dramatic and controversial final day of the Premiership campaign.
They needed just one point against Institute - the only team who could mathematically catch them - to be sure of returning to the top flight.
Warrenpoint Town have clinched an immediate return to the Irish Premiership by coming from 2-0 down to beat nearest rivals Institute 3-2.