He knew he would be inviting commercial and political retaliation that could hurt his small petroleum-exporting nation of 14 million people.
No such retaliation has yet come, but the standoff is young.
Britain says it won't allow Assange safe passage out of the country. Sweden, where Assange is wanted for questioning for alleged sexual misconduct, summoned Ecuador's ambassador to issue a stern protest.
Offering asylum to the man responsible for the biggest-ever spilling of U.S. secrets was apparently too attractive for Correa to resist.
It let him stake a claim to moral high ground, associating himself with a man whose adherents see him as a digital age Robin Hood crusading against abuses of big governments and corporations and who believe the Swedish extradition request is a pretext for shipping Assange to the United States to face a kangaroo court.
Correa stressed in a radio interview Friday that granting Assange asylum doesn't mean he agrees with everything the WikiLeaks chief does or says. He said he doesn't wish to impede Sweden's investigation, just ensure due process.
U.S. Rep. Eliot Engel, the ranking Democrat on the U.S. House's Western Hemisphere subcommittee, has met with Correa several times and believes he understands the gamble.
"He's a very smart guy and this wasn't done in a vacuum," Engel said. "The reason is to kind of be the head of the poke-the-United States-in-the-eye group."
That club includes Bolivia, Nicaragua, Argentina, Venezuela and Cuba the latter formerly the top Latin American destination for people fleeing U.S. and European prosecution.
"It's not just done because Julian Assange should have freedom or shouldn't be persecuted," Engel said of Correa. "If that were the case, why is he persecuting his own journalists?"
Correa was the reason the director of Ecuador's main opposition newspaper did some asylum-seeking of his own early this year, holing up in Panama's embassy in Quito for 14 days when Ecuador's high court upheld a criminal defamation ruling against him and other top editors.
Correa later pardoned them and forgave a $42 million damage award against El Universo, but free press and human rights groups say Ecuador's president remains a threat to any speech not to his liking.
He has also used media ownership restrictions enacted by a loyal congress to diminish the power of opposition-owned media, which he claims are intent on destroying him.
Political scientist Vicente Torrijos of Universidad del Rosario in Colombia said giving Assange asylum provides Correa "a huge smoke screen to try to hide his treatment of the press."
Torrijos called it "propagandistic pragmatism" likely to please those who like to cheer on anyone who stands up to the United States and its allies.
Such people have played a big role in electing leftist leaders across South America as U.S. influence waned over the past decade.
Marta Lagos, director of the Chile-based Latinobarometro polling firm, said she found it remarkable how Correa seized an opportunity to become standard-bearer of the sovereignty of little nations fed up with the sometimes imperious U.S. meddling in Latin America, as exposed in 2010 when WikiLeaks unleashed a quarter-million cables sent home by Washington's diplomats.
"It made the world bigger," she said. "There have been very few times when an emerging, underdeveloped country like Ecuador has committed an international political act of this potency."
Correa, 49, met the 41-year-old Assange for the first time in May, in a long-distance video hookup, when the Australian ex-hacker interviewed the president for his Kremlin-funded TV program.
"Your WikiLeaks have made us stronger," Correa told Assange. "Welcome to the club of the persecuted."
A month later, Assange was bedding down inside Ecuador's embassy in London.
One cable published by WikiLeaks prompted Correa to expel a U.S. ambassador in 2010 for alleging a former Ecuadorean police chief was corrupt and suggesting Correa had looked the other way.
Correa has spurned U.S.-backed multinational lenders and alienated international capitalists as he courts the likes of Russia, Iran and China. The latter is now Ecuador's main lender and buys most of its oil.
At home, analysts don't think the Assange embrace will have much effect on Correa's high popularity. His approval ratings top 70 percent, in large part due to generous social welfare spending.
Outside is another question.
"It is hard to see how Correa comes out a winner," said Michael Shifter, president of Inter-American Dialogue, a nonpartisan think tank in Washington. "There are no gains, only potential losses."
Adam Isacson of the Washington Office on Latin America said he was surprised by the move.
"Ecuador's diplomatic relations with Europe, especially the U.K., are in danger of collapsing," he said.
Engel expects the decision will alienate the U.S. Congress, prompting it to vote against renewal of the Andean Trade Preference Act, which allows Ecuadorean goods into the United States free of tariffs.
Forty-five percent of Ecuador's exports go to the U.S., accounting for about 400,000 jobs.
Trade with Sweden and Britain, by contrast, are piddling. Ecuador exported $23 million in goods, mostly food, to Sweden and $134 million in goods to Britain last year. Sweden doesn't even have an embassy in Ecuador.
A preferential trade pact with the European Union expires at the end of 2013 and if it's not renewed, Ecuador's exports could be cut 4 percent, costing it jobs. Talks on renewing that pact already have been stalled for six months.
Correa, in typical fashion, proclaims that he doesn't want a free trade agreement. He wants a different sort of pact, one that would protect Ecuador's weaker agricultural and manufacturing sectors.
It's a bit like Correa's proposal for preventing oil development in Ecuador's pristine Yasuni rainforest reserve. He has been asking European nations to pay Ecuador not to drill in the reserve.
So far, commitments have been few.