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Wimbledon champion Djokovic had lost the Cincinnati last to the Swiss on three past events.
“It’s an extremely extraordinary moment,” he said. “It’s the first occasion when I get the chance to stand with a winning trophy in Cincinnati.”
Triumph for world number two Federer would have presented to him his 99th career trophy, and also leveling the long-lasting rivals record at 23-23.
Djokovic will now hope to bring his current shape into the US Open, which begins on 27 August, having previously won two titles at Flushing Meadows.
Federer who was experiencing pressure from the beginning, saving two break points before holding win the first game.
World number 10 Djokovic finally broke his rival’s serve for 4-3 going on to win the opening set.
In any case, Federer began the second set the in a stronger position, hustling into a 2-0 lead before Djokovic battled back to level at 2-2.
He earned another decisive break at 4-3 before serving for triumph on his first championship point in one hour and 24 minutes to complete his career ‘Golden Masters’.
Federer said: “Congratulations to Novak for your amazing effort not just this week, but throughout your whole career, it is an amazing achievement.
“It’s been an extraordinary week, extreme on the players however we had some good times time.”