The Serb outlasted a tiring Murray in over three hours and 40 minutes to become the first man in the Open era to win the opening Grand Slam of the year in three consecutive years, and for the fourth time in total.
For Murray, however, the match finished in pain and disappointment, with a horrific-looking blister - which required medical attention after the second set - clearly causing him trouble for the remainder of the match.
There was little to choose between Djokovic and third-seeded Murray for over two hours as they split the first two sets on tie-breaks - and the first break did not come until the eighth game of the third set, when Djokovic began to take control.
After dropping the second set and receiving treatment to blisters on his left foot, Murray, who beat Roger Federer in five tough sets in the semi-finals on Friday, struggled to stick with the pace of Djokovic and faded quickly over the remainder of the match.
"What a joy. It's an incredible feeling to win this trophy again," Djokovic said. "This is definitely my favourite Grand Slam. I love this tournament. I love this court.
"I have to congratulate Andy and thank him. We have played so many great matches in the last two years. Bad luck for tonight but I wish you best of luck for the season."
US Open champion Murray was hoping to become the first Briton to win the title since Fred Perry in 1934 and the first man to win his second Grand slam immediately after winning his first.
"I'd like to thank Novak," Murray said. "His record here is incredible. There are very few people who have managed to do what he has done here.
"He's an amazing champion, so well done to him."
Djokovic, who has now won four of his six Grand Slam titles in Melbourne (also triumphing in 2008), had the first opportunity to secure the break in the opening set. He held four points in the sixth game of the match to get ahead, but could not take advantage of any of them as Murray went on to hold with an ace down the centre of the court.
The world number one also had a chance to break in the eighth game but again Murray denied him, saving the break point with a forehand drive volley winner, before going on to force the tie-break after another couple of service holds.
After playing two poor tie-breaks against Federer, Murray was clearly in no mood to make the same mistake in the final. He raced out to a 4-0 lead after an early double fault and successive ground-stroke errors from Djokovic.
The Scot never looked like losing the breaker, despite being under pressure for much of the opening set, and sealed it 7-2 to raise hopes of a repeat of his US Open triumph.
The second set saw an increasingly confident Murray reverse the pressure of the opener; the world number three looking the more likely to break as Djokovic mentally checked out of the match for a series of games.
Murray held three break points in just the second game of the set, but he could do nothing with any of them as Djokovic's trademark defensive play somehow kept him in it.
Regaining his concentration just in time, both players looking increasingly unlikely to drop serve as the set went on, the Serb then seized the initiative early in the second tie-break of the match.
Serving at 1-2 down, Murray seemingly got distracted mid-serve as a feather floated down from one of the birds in the roof of the Rod Laver Arena. A double fault quickly followed from the Scot and Djokovic pounced to take seal the set 7-3 in the breaker when Murray dumped a backhand into the bottom of the net.
The momentum of the match swung further in favour of the defending champion when Murray took an injury time-out at the end of the second set for treatment to blisters on his right foot.
Even in spite of this, however, the early stages of the third set went with serve as Murray and Djokovic both took the opportunity of returning to regain some energy after the two gruelling opening sets.
As the set went on, though, it became abundantly clear that Djokovic, who had an extra day off after playing his semi-final on Thursday, was the fresher of the two players. The Serb clearly lifted his level as Murray struggled to maintain his.
An epic 36-stroke rally in the eighth game was the turning point in the end, Djokovic scrambling defensively around the baseline before finding an injection of pace on an off-forehand across court that landed right in the corner for a winner.
The Serb went on to break at the third attempt when a dipping backhand from Murray caught the top of the net and dropped agonisingly back on to the Scot’s side of the net.
An emphatic service game followed from Djokovic to put him two sets to one ahead, and the match fizzled out thereafter as the fourth was much more one-sided affair.
Murray was fading fast while Djokovic looked like he could continue playing at that same level for hours. The defending champion broke in the fourth game before securing the double break two games later, and going on to seal the title when another Murray backhand ended up in the net.
Djokovic was the worthiest of champions after a superb two weeks of tennis, while Murray will have no complaints - and will be itching to get back on court with his long-time friend and rival to take his revenge.