With a brief exception mid-way through the first set when Nadal reeled off three straight games to get back in contention, Djokovic dominated throughout and wrapped up his third victory at the season-ending championships after 97 minutes when Nadal went for too acute an angle on a cross-court forehand and hit into the tramlines.
Nadal had already ensured he would finish the end of the year as the world number one but with Djokovic going unbeaten since the US Open, picking up titles in Beijing, Shanghai and Paris as well as London, the start of 2014 is already shaping up to be an intriguing prospect.
"The year-end number one is deservedly in Nadal's hands because he had two Grand Slam wins, the best season out of all players, the most titles," said Djokovic. "But next to the run that I had in 2011, this is definitely the second best I've had.
"The most positive thing that I can take from this two and a half months is the fact that I managed to regroup after a few big losses after Nadal, especially Roland Garros, US Open final and Wimbledon final.
"I've worked harder and played better, become an even more skilful player. This is definitely the best possible way that I can finish the season," added Djokovic, who next week will lead Serbia against the Czech Republic in the Davis Cup final.
Nadal looked nervous from the outset, something especially clear on serve as he slapped down four double faults in the first three and a half games of the match to help Djokovic out to a break lead, with a point for the double break.
In contrast Djokovic stamped his authority on the match in the first three games, hitting well from the very first point of the match.
The Serb reeled off three straight games to open proceedings and looked poised to make it four after Nadal's second double fault handed him another break point.
But the Spaniard hit back with three consecutive games of his own to level the clash at three-all and seemingly rid himself of the nerves that plagued him at the outset.
Djokovic, however, never really looked like relinquishing his early dominance, and went on another run of three games to wrap up the opening set with an ace out wide.
The second set was a more straightforward affair, Djokovic again breaking early before holding on, despite late pressure from Nadal, to seal the title.
A clever, inside-out blocked forehand return from Djokovic set up the break as Nadal struggled to change direction at short notice and netted his forehand response.
The Spaniard failed to make much of an impact on the Djokovic serve in the second set, the Serb regularly picking up free points as Nadal won just 31 per cent of points against the first serve and 30 per cent against the second.
Nadal was forced to call on all of his reserves to fight off further break points in the seventh game and then deny Djokovic on a first championship point in the ninth.
The Spaniard also managed to save a second championship point, this time on the Djokovic serve, with arguably the shot of the match when he raced up to the net and flicked a backhand passing shot winner across court on the angle.
But a third was beyond him as he went for a series of increasingly angled cross court forehands only to eventually hit wide and hand Djokovic a well-deserved title.
"I think at the beginning he was playing much better than me, the first three games no doubt," Nadal said. "After that I didn't see the difference.
"I have to congratulate a super player like Novak. I wish you the best of luck in the Davis Cup, you deserve it.
"This is probably one of the best seasons of my career and playing this match in this stadium is just fantastic for me."