He won the final by 7-5 6-4.
Djokovic saw his 33rd ATP Masters 1000 title which could tie Rafael Nadal's record relinquished, but had already secured his top place at the upcoming ATP Rankings following Nadal's withdrawal from the tournament earlier this week.
Novak Djokovic ascends to world No 1 today for the first time in two years, but not amid a blaze of glory after being upset by Karen Khachanov, the 22-year-old from Russian Federation, in the final of the Paris Masters. He took exception to some comments made in Khachanov's box and spoke to his opponent at the end of the first set.
Khachanov, who crushed Dominic Thiem 6-4, 6-1 in the semi-final on Saturday, took advantage of Djokovic appearing to be a little under-the-weather after a week struggling with flu-like symptoms.
"Karen played really well and he deserved to win", Djokovic said.
"But overall I'm happy with my game".
The 22-year-old, ranked at number 18 in the world, simply refused to allow the new world number one to settle in the showpiece encounter.
The Russian fully demonstrated his confidence later on, finishing quadruple breaks for a 6-1 second set victory.
"I'm happy with the way I'm playing". View FedEx ATP Head2Head for the following match-up at the Rolex Paris Masters and vote for the players you think will win!
Federer, the 2011 champion in Paris, last beat Djokovic at the ATP Tour Finals in 2015 and was comprehensively beaten by his long-time rival in the Cincinnati Masters final on the eve of the US Open this year. Five months ago, it was highly improbable considering my ranking and the way I played and felt on the court. "He deserves the trophy", Djokovic told the crowd. Federer will need to win this time if he is to keep alive his albeit slim chance of regaining the year-end No1, and with it his 100th title.
The Russian, who had prevailed in just three of his 19 encounters against players in the top 10, became the third different victor of a 1000 series event this season, could still take part in the ATP Tour Finals in London as a second alternate.
'And he showed great quality today and he showed why we're going to see a lot of him in the future'. Federer's down the T serve was returned well by Djokovic straight in the middle and the Swiss ace took his time before whipping it to Djokovic's right to what looked like a sure victor.