The Scot struggled with his serve in the opening set, as Nadal broke him in just the second game of the match.
While the Brit was able to hold his service games for the remainder of the opener, the defending champion did the same to take the first set 6-3.
However, the 24-year-old proceeded to hit six aces, three of which came in a row to seal the fifth game, and broke the Spaniard twice to seal the second set 6-2.
The British number one then carried that momentum into the third, where he dropped just four points en route to a 6-0 final set result and his first win over the world number two in six attempts.
The title takes Murray's season tally to four, following success at Queen's, Cincinnati and Bangkok.