Lars Stindl was gifted the only goal of the game after 20 minutes as Germany held out against the Copa America champions to add the Confederations Cup title to their roll of honours.
As was the case when the two sides met in the group stages, Chile got off to a quick start and Arturo Vidal was the first to threaten the opposition goal with a long-range drive which bounced wide of the target.
Marc-Andre ter Stegen was called into action for the first time shortly afterwards when Eduardo Vargas capitalised on a loose pass from Leon Goretzka before seeing his low drive kept out by the German shot-stopper.
Chile continued to prevent Germany from getting into any sort of rhythm while creating chances of their own, and Mauricio Isla squandered a clear opening after 19 minutes when the ball broke to him inside the area.
Juan Antonio Pizzi's side should have made their dominance pay when Ter Stegen spilt Vidal's effort at the feet of Sanchez, but the Arsenal man couldn't turn the rebound home from close range and the miss was punished when Germany took the lead against the run of play just seconds later.
It was a mistake which gifted Germany the opening goal as Timo Werner caught Marcelo Diaz in possession on the edge of the penalty area before unselfishly squaring the ball for Stindl to roll a simple tap-in into the empty net.
Chile quickly regained control of the game, though, and Charles Aranguiz had the chance to respond quickly but couldn't connect properly with a cross into the area.
Vidal then fired another long-range effort over the crossbar before Germany began to get more joy going forward in the final 10 minutes of the half, with Goretzka flashing one low strike narrowly wide of the far post having been picked out by Sebastian Rudy.
Julian Draxler then placed a measured finish just wide before Chile almost shot themselves in the foot with another mistake, this time Gonzalo Jara giving the ball away and needing Claudio Bravo to come to his rescue by thwarting Goretzka from close range.
Chile again started the second half brightly, but the first chance fell to Germany when Jara threw himself in the way of Draxler's effort to divert it wide.
The subject of VAR reared its head again shortly after the hour mark when Jara caught Werner with an elbow, only to be shown a yellow card rather than a red after the referee had consulted a video replay.
Having been let off by the leniency of the referee Chile began to pile the pressure on Germany in the final 20 minutes, with Vargas drawing a save from the keeper before Vidal blazed a glorious chance well over the crossbar when he should have done better.
Ter Stegen was called into action again to deny Aranguiz and Leonardo Valencia heading into the last 10 minutes, but he was beaten to the ball by Edson Puch moments later and breathed a sigh of relief when Anyelo Sagal somehow fired the resulting cutback over the bar with the goal gaping.
It was to be Chile's best opportunity for an equaliser, but they kept pushing and almost rescued extra time with one of the last kicks of the match as Alexis Sanchez drew a smart stop from the keeper with a stoppage-time free kick.
Germany held out in the end, though, to deny Chile a third international trophy in as many years and completing a successful few days for the national team having also seen their Under-21 side win the European Championship on Friday.