Three years after thrashing Andy Murray for the 2016 trophy, the Serbian regained his Melbourne Park throne with a 6-3 6-2 6-3 procession, clinching his 15th Grand Slam title and third in succession.
Moving past Pete Sampras into outright third on the all-time list of Grand Slam winners, Djokovic will head to Roland Garros looking for a second "Nole Slam", having already swept all four majors in 2015-16.
Only Federer's 20 and Nadal's 17 outstrip Djokovic's tally of Grand Slam trophies, but on the strength of the champion's virtuoso performance at Rod Laver Arena, they will be looking nervously over their shoulders.
It was a win that left even Djokovic marvelling, seven years after needing a record five hours and 53 minutes to fell the Spaniard in the 2012 classic at Melbourne Park.
The peerless Serb broke Nadal five times while conceding only a single break point, and coughed up only four unforced errors in the first two sets.
Sealing the win when a desperate Nadal fired a backhand long, Djokovic kneeled on the blue hardcourt and shook his fists at the sky.
He moved past Federer and Australian great Roy Emerson's six Melbourne titles, after two barren years Down Under with elbow problems.
French pair Pierre-Hugues Herbert and Nicolas Mahut beat 2017 champions Finn Henri Kontinen and local hope John Peers 6-4 7-6(1) to win their maiden Australian Open men's doubles title on Sunday.
