The world number one prevented Roger Federer from making it three in a row at the O2 arena with a battling 7-6 7-5 victory.
Djokovic dedicates ATP World Tour Finals victory to sick father as he ends Federer's reign in London
Srdjan Djokovic was absent from his normal courtside position as his son beat Federer 7-6 7-5 at the O2 Arena and cemented his place as the world's best player.
He was not out of mind, however, and Djokovic was quick to pay tribute to his father after his gritty victory over world number two Federer, winner of the title for the past two years.
"It's been a very long year, a very long two years, but very successful two years," five-times grand slam champion Djokovic, who ended a second consecutive season as world number one having won a career best 75 matches, told reporters.
"I didn't really know how I would follow up after my incredible 2011, but I believed that I have to use the time where I'm playing the best tennis of my life.
"It was a fantastic year, where I've had to face a lot of difficulties off the court as well. Especially coming into this tournament, having my father fighting his own fight for health gave me extra strength that I wanted to play for him in a way.
"That's one of the reasons I really gave it all every match, especially tonight. This was a title for him."
Djokovic's father has been seriously ill with a respiratory problem and Djokovic has spent hours on the phone over the past eight days monitoring his progress.
It makes his achievement of marching to the title undefeated, having won all his round-robin matches, including one against US Open champion Andy Murray, even more impressive.
"I actually feel even more satisfied right now than last year, even though I had an incredible 2011," the 25-year-old, who won three of the four majors last year after starting the season with a 43-match winning streak, said.
"I feel this year, considering the circumstances that I had to face on and off the court, expectations, all these things, I believe that this year has been even more successful for me."
Federer had begun sloppily against Murray on Sunday before recovering to win in three sets, but he was sharp from the start against the Serbian, winning his opening service game in less than a minute.
The same could not be said for Djokovic, who started his first service game with a double fault. Remarkably Federer won the first nine points but Djokovic steadied the ship before breaking back for 3-2.
Djokovic achieved another break after a long ninth game and it left the 25-year-old serving for the set. He had a set point but he could not take it and Federer broke back when Djokovic netted a forehand.
The Serb was on the floor in the next game as he flung himself after a Federer forehand, which necessitated a patch-up from the trainer, but he recovered from 0-30 to force a tie-break. Djokovic had the first set point but Federer saved it in a remarkable rally.
Federer followed up with an errant backhand and this time Djokovic capitalised. Djokovic was on the back foot again, though, as Federer piled on the pressure at the start of the second set, and he got his break at the fourth time of asking.
The world number two kept pressing and missed a chance for a double break in the fifth game, which he was almost made to regret as Djokovic pushed for a break of his own to level at 4-4.
Federer held on and brought up two set points at 5-4 but he let the chance slip away and this time Djokovic did capitalise, a forehand into the corner too much for the champion. Djokovic eventually prevailed after driving a backhand passing shot beyond the despairing reach of his opponent on his first match point.
With victory comes the $1.76m (Dh6.5m) jackpot for remaining unbeaten.
"I was playing really great tennis throughout the whole week," Djokovic said.
"The first match, you know, still feeling a little bit rusty on the court. But I won against Andy (Murray).
"That was a big confidence booster for me. You know, every match after that I felt like I played really very close to the top of my game.
"Tonight whenever I needed to, to come up with some really good shots, really focus myself and get every ball back in the court, I've done that. I cannot be more thrilled."
For 31-year-old Federer, who claimed his seventh Wimbledon title this year and temporarily dislodged Djokovic from the No. 1 spot to break Pete Sampras's record of 286 weeks at the top of the rankings, there was frustration but few regrets.
"You have to get over the finish line in the set and then obviously in the match," Federer, who also reached the Olympic singles final where he was beaten by Andy Murray, told reporters. "He was better at that today.
"It was great intensity, a good crowd. So it was fun playing. I think it's been a fantastic season to be part of."
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