The Battle of the Giant of Babil is a form of diversion orchestrated by Cid Pollendina of Baron and the Dwarf King Giott of the Underworld to allow Cecil and the party to gain entrance to the Giant via the Lunar Whale and destroy it from within. The relief force of the Red Wings and the dwarven tanks comes as a surprise to Cecil, who was not expecting aid. The battle marks the reappearance of Yang, who was thought killed during the assault on the Tower of Babil; Edward, fully recovered from his injuries; Palom and Porom, restored from the self-inflicted petrification by the Elder of Mysidia; and of Cid himself, back from the Underworld.
The in-game events describe Cecil and the party making their way down from the Giant's head to its chest, where they fight the Four Archfiends and, afterward, the Giant's CPU. Its destruction triggers the Giant's collapse.
Just prior to the Giant's destruction, Golbez appears and is liberated from Zemus's influence by Fusoya. The two leave to defeat Zemus by themselves while the party, joined by Kain, who had been freed from Zemus's influence as well, escape by boarding the Lunar Whale.