By Brian Homewood
Federer, appearing in his 98th ATP final of which he has won 68, triumphed 6-1 6-3 against the 21-year-old Japanese wildcard, who was playing the record 16-times grand slam champion for the first time.
Nishikori took only six points off Federer's serve and had to wait until the last game before managing a break point.
"It was a dream come true. He has always been my idol. It was a great experience for me. I am looking forward to playing against him again," Nishikori, who trained with Federer five years ago, told reporters.
"I was very excited to be playing Roger here in a final and I started a little bit nervous. I only started to play well in the final few points.
"I'm disappointed at the way I played today, he was too good for me and I felt I couldn't do anything against him.
Federer, 30, was playing his first tournament since the U.S. Open and said he had made the right decision to skip the tournament in Shanghai even if it meant disappointing his Chinese fans.
"I'm feeling fit and ready for more. I am hungry and fired up and that is how you want to be at this stage of the season," added the world number four, who served five aces and no double faults," the Swiss world number four added.
"Next season will be packed with the Olympics, there will be a lot of tennis so I have to be prepared.
Nishikori held serve in the opening game but the dominant Swiss rattled off the next seven as he totally dominated proceedings against the world number 32.
Nishikori put up more resistance in the second set, saving two break points as held serve in the second game to at least end Federer's run.
However, it was only a matter of time and Federer broke in the sixth game. Nishikori defiantly saved four break points but could do nothing about a perfect Federer lob which left him stranded on the fifth.
The Japanese had his only break point in the ninth game but Federer saved it and went on to finish off the match with a forehand smash.
(Editing by Ed Osmond)