Youzhny did not drop a set on his way to a fifth career title and extended Russia's title streak in the home event to six consecutive years since American Taylor Dent won here in 2003.
"The first set was a tough one for both of us," Youzhny said. "But in the second set he appeared to be really tired after a tough doubles match he had played late on Saturday."
Tipsarevic, who had not lost a set on the way to his first ATP Tour final, said: "I'm obviously disappointed because I've lost. But I think, I didn't lose today _ Misha (Mikhail) beat me. He was a better player. Though the third set was 6-4, I was really struggling to win my service games, while he was winning his very easy."
The sixth-seeded Serb prevailed on the first-set tiebreaker, but the 30th-ranked Youzhny charged back, winning eight consecutive games to level at one set apiece and lead 2-0 in the decisive set. Tipsarevic saved four match points in the ninth game before Youzhny served for the match and sealed the win with a forehand crosscourt shot.
It was Youzny's first final in 11 appearances at the event. He is now 5-11 in ATP finals.
Schiavone is 2-10 in WTA Tour finals. She also won the 2007 Gastein Ladies.
The eighth-seeded Italian, the 2005 runner-up, broke decisively in the eighth game of the first set after Govortsova had saved five break points in the sixth game.
Schiavone said that a break on the ninth deuce in the sixth game for a 4-2 lead was the key moment of the match.
"The game was very long but I did very good," Schiavone said. "Everything changed at that moment. When I found the way, it was much easier, and she (Govortsova) didn't know how to finish points, I think."
Govortsova broke back immediately, but Schiavone then won eight games in the row.
"It's difficult to play with Francesca on this (hard-court) surface," Govortsova said. "She practically made no mistakes. She made me run a lot in the first set and it had an impact on me later in the match."
The 24th-ranked Schiavone was playing in her second final in as many weeks, having lost to Samantha Stosur of Australia at Osaka, Japan.
The 67th-ranked Govortsova was playing in her second career final.
The 20th edition of the Kremlin Cup had a weakened women's draw because seven of the world's top players had qualified for the Doha Championships before the Moscow tournament and opted to skip it.
The seventh-ranked Vera Zvonareva of Russia, defending champion Jelena Jankovic and Agnieszka Radwanska, ranked 10th, were eliminated in the early rounds.