Murray claimed an extraordinary 6-3 6-2 victory in one hour and 28 minutes as he dethroned clay king Nadal in front of his Spanish fans.
It was the 10th 1000 Masters title of Murray’s career but his first on a clay surface he has traditionally struggled on.
The Scot continued where he had left off in winning his first clay-court title at the Munich Open on Monday by dominating throughout to beat Nadal on clay for the first time in his career.
Nadal has struggled with injury in recent years but he looked to be getting back to his best before the start of the French Open later this month as he had not dropped a set en route to the final.
But the four-time champion ran into a ruthless Murray, who made few unforced errors and delivered countless winners to stun the Spaniard.
Nadal fought to lead 30-15 on the Murray serve at 5-2 down in the second set but the Scot closed the game out to take the title.
Murray has been in a rich vein of form since he married Kim Sears at Dunblane Cathedral last month and after the game he wrote ‘Marriage Works!’ on the lens of a camera.
“It (marriage) has been nice and a lot of people have spoken about the honeymoon period,” said Murray.
“But we’ve been together a very long time and getting married was the next step.
“I’ve always said if the personal stuff is happy and under control that helps your performance on the court.
“But I also feel healthy this year and I have trained well, I’m in much better shape on the clay than I have been for a number of years.”
The 27-year-old now looks in good shape to make a serious attempt to challenge for the French Open title at Roland Garros in Paris.
He continued: “It was an incredible atmosphere and to play Rafa in Spain is extremely tough,”
“It’s one of the hardest things in tennis to try and win against Rafa on clay, so I’m glad I’ve managed to do it.
“I would like to thank my team for getting me in good shape for the clay court season and I will keep trying to play well over the next few weeks, with Roland Garros just around the corner
“Rafa might feel he could have played better but I’m sure he will be playing his best tennis again in the next few weeks, and it’s great to see him playing in the finals of these great events.”