The world number 10, who sealed her spot at the WTA's season-ending championships in Istanbul later this month by virtue of reaching the semi-finals, broke her rival three times in the first set. She then survived two set-points in both the second set and resulting tie-break for the win.
Serbian Ivanovic, a twice winner of the hard-court tournament, had not dropped a set on her way to the final but was forced to continue her wait for her 12th WTA title and first since 2011.
"At the end it was pretty close," Kerber said in her post-match interview. "I am very happy to have won because Ana is an exceptional player.
"I focused on myself but I should have been calmer about taking my chances for winning the match.
Kerber shot to a 4-1 lead in the opening set before Ivanovic broke back twice to level matters.
One further break of serve was enough for 25-year-old Kerber to claim the first set.
World number 16 Ivanovic saved three match points when down 5-4 in the second set and had two chances to force the match into a third set before it went into a tie-breaker.
She then had a further two set points in the tie-breaker, but Kerber rattled off four straight points to claim her third career WTA title.