DEC & IBM 370 had full virtuallization in the 1970's
The IBM 370VM operating system implementated full virtuallization down to the hardware level in the 1970s. You could run whatever S370 operating system you wanted under VM, including another version of OS370/VM. All of the protected hardware instructions were completely implemented.
There was also a VM version of the OS for the Digital Equipment PDP-8. It allowed you to run multiple OS's underneath the TSS/8 OS. Each user gets a virtual 4K PDP-8; many of the
utilities users ran on these virtual machines were only slightly modified
versions of utilities from the Disk Monitor System or paper-tape
environments. Internally, TSS8 consists of RMON, the resident monitor, DMON,
the disk monitor (file system), and KMON, the keyboard monitor (command shell).
BASIC was well supported, while restricted (4K) versions of FORTRAN D and
Algol were available.