Reigning two-time year-end No. 1 Novak Djokovic defeated six-time event champion Roger Federer in Monday's marquee finale at the season-ending ATP World Tour Finals.

Djokovic captured the title for the second time in five years by besting the second-seeded former No. 1 Federer in 7-6 (8-6), 7-5 fashion on the indoor hardcourt at The O2 Arena.

"It's an extreme honor for me to be here with Roger," Djokovic said. "It's been a fantastic season."

Federer owns a record six titles at this prestigious eight-man tournament, including 2010 and last year, when he topped Frenchman Jo-Wilfried Tsonga in the final in London.

The 31-year-old Federer jumped out to a 3-0 lead in the first set on Monday, including a break in the second game, but Djokovic fought back in a stanza that would eventually go to a tiebreak.

Federer saved a set point in the tiebreak by capping a world-class rally with a gorgeous cross-court forehand winner, much to the amazement of an appreciative Djokovic.

The 25-year-old Serbian star, however, would eventually convert on a third set point to take the lead on Day 8.

An equally as tight second set saw Federer get another early break, but Djokovic rebounded again, like he did in the opening set, and eventually broke Federer in the final game, as the athletic Serb struck a wonderful two-handed backhand winner to end the match -- the final match for long-time chair umpire Lars Graff of Sweden.

The high-quality affair ended in 2 hours, 14 minutes and featured eight aces by Federer and four breaks by the deserving champion Djokovic, who tallied 30 winners in the big victory.

Djokovic, who also won this tournament in 2008 in Shanghai, secured his 34th career title. He went 6-5 in his 2012 finals, including an Australian Open title and runner-up finishes at the French and U.S. Opens.

The 17-time Grand Slam king Federer was trying for a bit of history on Monday, as he was gunning for his 77th career ATP title, which would have tied him with John McEnroe for third place on the men's all-time list. Only Jimmy Connors (109) and Ivan Lendl (94) have won more titles in the Open Era (1968).

The Swiss superstar, who settled for six titles in 10 finals in 2012, was trying to become the first man since Lendl in 1987 to win the season-ending tournament three straight years. Federer is now 76-34 in his career title matches.

The seven-time Wimbledon champion Federer dropped to 16-13 lifetime against Djokovic, who won three of their five meetings this season.

Djokovic claimed $1.76 million as an undefeated champion this week, while Federer collected $800,000 with his runner-up status. Federer also lost in the 2005 Tour Finals final in Shanghai. The Swiss great won this event back-to- back in 2003 and 2004, 2006 and 2007, and 2010 and 2011.

In the doubles final on Monday, sixth-seeded Spaniards Marcel Granollers and Marc Lopez beat an Indian pairing of Mahesh Bhupathi and Rohan Bopanna 7-5, 3-6, 10-3.

The top-seeded Bryan brothers, Bob and Mike, failed to make it past the round- robin stage at The O2.