Djokovic, who was already guaranteed to take over the No 1 ranking from the Spaniard on Monday, extended his mastery over Nadal this season with a fifth straight head-to-head victory.
Djokovic assured himself of the top ranking just by reaching the final. He opened the season with 41 straight wins, including the Australian Open title, but his 43-match winning streak came to an end against Roger Federer in the French Open semi-finals.
The win over Nadal improved Djokovic's record in 2011 to 48-1, with five of them coming against the Spaniard in finals - two on hard courts, two on clay and now one on grass.
The Serbian President Boris Tadic was in the Royal Box along with several former champions to watch the match on Centre Court, and when Nadal sent a backhand long on match point, Djokovic turned to face them and dropped to the turf, laying on his back with his arms spread wide.
Djokovic played near-flawless tennis in the first two sets, and his incredible movement and precise shot placement gave him a big lead. His play dipped in the third, but it returned in the fourth to secure him a third Grand Slam title.
Nadal had won 20 straight matches at the All England Club, including the 2008 and '10 titles. He missed the 2009 tournament because of injury, but was playing in his fifth Wimbledon final in six years.
Nadal injured his left foot in a fourth-round win, but painkilling injections helped him roll through the next two rounds and into the final.