Tyrelle Harris, 20, was found guilty of Mr Gallagher's murder outside West Cross Shopping Centre on April 26 last year.
The jury sitting at Wolverhampton Crown Court returned their verdict against Harris today after eight hours and 20 minutes of deliberating.
In a statement released after the verdict, the family of Mr Gallagher said: "Thankfully today [Friday] Karl’s murderer has been taken off the streets, no other family will get to go through the pain that we have gone through, and no other mother will ever have to say goodbye to her son at the hands of Tyrelle Harris.
"We are truly thankful that today there has been some justice for Karl, but this will never free us from the life sentence that we now have to learn to live with."
Watch: The moments that led to murder
DI Adam Jobson, from West Midlands Police’s homicide team said: “This truly is a tragic case and really highlights the devastating effects of knife crime.
“Karl met his killer by chance, only moments before a knife was used on him.
“He died from a single stab wound to the chest.
“We will never know what led Harris to killing Karl that day, but we do know that if Harris hadn’t chosen to carry a knife, three children would have their dad and Harris wouldn’t be facing a life sentence in prison.
The trial had heard both men confronted one another after arriving in separate cars and groups, before Harris pulled out a flick knife and stabbed Mr Gallagher, who collapsed on the ground within seconds while Harris and his associates fled the scene on foot and ran across a dual carriageway.
Mr Gallagher, who had arrived at 4.30pm to order food from F1 Pizza, was pronounced dead at the scene at 5.21pm – despite the best efforts of paramedics.
A post-mortem examination revealed Mr Gallagher died of a single stab wound measuring three-centimetres to his upper chest.
Coverage of the case:
Opening the prosecution case, Sarah Whitehouse said: "Karl Gallagher and his friends returned from the shopping centre and sat in their car, waiting for pizza to be cooked.
“Within minutes, Mr Harris had fatally stabbed Mr Gallagher. He was captured on video carrying out the stabbing."
She added: "Mr Harris pulled out a flick knife at that point and Karl Gallagher backed away.
“Mr Harris has followed him as he backed away and then the stabbing happened.
“Tyrelle Harris was the person who stabbed Karl Gallagher, there is no dispute about that.
“He admits that he stabbed Mr Gallagher but says he was acting in self defence.”
The incident was captured on a number of CCTV cameras alongside a mobile phone recording.
Harris, of Helvellyn Way, West Bromwich, discarded the knife down a drain in nearby Orchid Close as he fled, the prosecution said. The weapon was later recovered.
In a defence case statement read to the court, David Mason, defending Harris, said his client had acted in self-defence.
Mr Mason QC told jurors the 20-year-old – who was 19 at the time of the offence – had seen Mr Gallagher posing with a firearm on social media.
Harris believed Mr Gallagher had served a lengthy time in prison which was connected with firearms and was fearful, a judge was told.
During his evidence, Mr Mason asked Harris: “How did you feel when you heard that he’d died?”
Harris replied: “I was feeling numb. I didn’t know how to feel.”
Mr Mason also asked him: “Did you seriously intend to hurt Karl Gallagher?”
Harris replied: “No. I didn’t intend to hurt him. No.”
Mr Mason then asked: “Did you intend to kill Karl Gallagher?” Again Harris replied, “no”.
Harris was remanded in custody to be sentenced on April 30.
Four other men were arrested on suspicion of murder, and a further four men were arrested on suspicion of assisting an offender. They were all released without charge.