O'Sullivan established a 5-4 lead over John Higgins in the opening session.
The five-times world champion made sure of a narrow advantage going into the evening session when he won a scrappy ninth frame.
Until then, both players had impressed at the Ricoh Arena with some impressive break-building, although neither could produce a century.
“I am delighted to put my name on the list of Champion of Champions winners,” said Higgins. “It has been a good two weeks and you have to roll with it when it is going for you.
“I can’t speak for Ronnie but I was buzzed up coming into play. I just wish my old man was still here to see me take part in these finals,” Higgins added, referring to his father John who passed away in 2011.
“I thought I had missed the boat at 5-4, he missed a couple but I never took advantage. I was thinking, is that going to give him confidence and then he will go on a roll? I stuck with it and felt great coming into tonight.
“When I play like that, there is no greater feeling. You get in the balls and think you are going to clear up at every chance. I missed a couple at the end but potted a good long red to swing it back my way and finish it off.
"There is no better feeling than doing it in front of a packed audience, playing against somebody as good as Ronnie.”
Higgins won the first frame with a break of 75, but O'Sullivan levelled with a 68. Higgins went 2-1 up but O'Sullivan's clearance of 88 saw him square things up again.
O'Sullivan produced a 90 to take the lead for the first time but Higgins responded with a 79, then a 65 which gave the Scotsman a 4-3 lead.
Both players uncharacteristically missed easy blacks in an eighth frame O'Sullivan edged with breaks of 61 and 27 - and the 40-year-old then gained the edge in a see-saw contest after Higgins had missed a brown.
At the start of the evening session, O’Sullivan levelled at 6-6 after Higgins took the lead at the restart, only for Higgins to reassert his lead in the thirteenth frame.
O’Sullivan then hit the first century of the game to bring the scores to 7-7, only for Higgins to again take the lead.
Higgins extended his lead to 9-7, and O'Sullivan failed to score a point in the final frame, giving Higgins back-to-back victories in the competition.
“Well played to John, he played fantastic all week – he was by far the best player of the week. I tried to hang on in there today and make a game of it. John is on a roll at the minute, he is really starting to play as he did a few years ago, so for me he is probably the best player in the world at the moment with the way he is playing.
“I need to find some consistency if I am going to win tournaments again. It is ok playing in spells but you get found out playing players like John. Against most players I might have had a chance of winning, but against world-class opposition I made too many mistakes.”