Williams - who beat top seed Roberto Vinci in the quarters and claimed an epic 5-7 6-4 6-4 semi win over Andrea Petkovic - was in control from start to finish as she wrapped up the victory in one hour and 22 minutes.
Instead of relying on her traditionally strong serve, the American was happy to dictate the tempo from the baseline as she defended well and waited for her opponent to crack.
"I had to work so hard to get to the final - the match against Andrea was so challenging, and the two matches before as well, and even my first round I had to stay really focused," Williams said.
"Monica was in her second final here so she obviously feels really good on this court. You have to hit five, six, seven shots more than usual. It can be frustrating. She's tricky. You have to be ready."
The American former world number one, a seven-times Grand Slam winner, has suffered serious health problems in recent years but has been on the comeback trail since March this year.
The 32-year-old claimed Wimbledon and Olympics doubles crowns with her younger sister Serena, but this is her first solo win since the 2010 Acapulco title and her 44th career title.
She had failed to get past the second round of any of the three Grand Slams she contested in 2012, having recovered from a long battle with the auto-immune disease Sjoegren's Syndrome and several serious injuries.
World number 70 Niculescu, meanwhile, has now lost the Luxembourg Open final two years in a row.