Formula One stewards opened an immediate investigation into Rosberg's lock-up at the Mirabeau corner in the dying seconds that brought out the yellow warning flags at a crucial moment in qualifying.
Hamilton, winner of the last four races, had to settle for second place after aborting his final lap.
"I thought it was over," a smiling Rosberg, last year's winner and Hamilton's closest title rival, told reporters. "I'm happy it worked out. Pole at home is fantastic - it couldn't be better.
"Of course I'm sorry for what happened to Lewis. I didn't know where exactly he was. But once I was reversing I didn't see who was coming up. Of course it's not great, but that's the way it is," he added.
Hamilton said, a forced smile on his face, that it was 'ironic' for his rival to secure pole in such a fashion.
The Briton has a three point lead over Rosberg after five races, all won by dominant Mercedes who have also started all from pole.
Australian Daniel Ricciardo will start in third place for Red Bull with quadruple world champion team mate Sebastian Vettel alongside on the second row.
The Ferrari pairing of Fernando Alonso and Kimi Raikkonen filled the third row.