Cilic, who had lost all four previous meetings against Wawrinka, finally broke the jinx to carve out a hard-fought 7-6 (7/2), 7-6 (7/3) win in a final that lasted two hours and 40 minutes.
The second-seeded Cilic became the first player after Spanish veteran Carlos Moya's victories in 2004 and 2005 to win back-to-back crowns in South Asia's only ATP event.
The world number 14 earned 68,450 dollars and 250 ranking points for his morale-boosting effort ahead of the season's first Grand Slam, the Australian Open, which starts in Melbourne on January 18.
The 21st-ranked Wawrinka, seeded third here behind Roger Soderling and Cilic, picked up 35,980 dollars and 150 ranking points.
Cilic dropped just one set in five matches in the 400,000-dollar event at the Nungambakkam Tennis Stadium to clinch his fourth career title in six ATP finals.
Wawrinka secured the first break of the match in the eight game, but Cilic broke back immediately in the ninth to force the set into the tie-breaker, which the Croatian won easily.
The Swiss star, who called for the trainer in the first set for a neck strain, lost his serve in the second game of the second set, but broke back in the third to draw level.
Cilic wasted two break points for a 5-3 lead as Wawrinka fought back to take the match into a second tie-breaker, which the tall Croatian dominated once again.