Federer, 37, was seeking a record-extending seventh title but was unable to cope with the pressure created by Zverev's power and precision at the O2 Arena.
Zverev has always been heralded as the young player most likely to carry the mantle for the men's game once the likes of Djokovic, Federer, Rafael Nadal and Andy Murray have retired, with the 6ft 6in German's booming serve, crunching groundstrokes and improved play around the net showing he has all the facets needed to reach the very top.
The momentum shifted slightly in the next game as Zverev hit loose back-to-back double faults to let Djokovic back in, but he was unaffected, again exerting enormous pressure on the Djokovic serve to break for the third time in a row and re-take the lead.
Zverev, billed as the player most likely to lead the sport into a new golden era once the holy trinity of Roger Federer, Djokovic and Rafael Nadal have hung up their rackets, took full advantage of an off-key Serb to win 6-4, 6-3. "There's many positives. So I'm excited for next season".
Anderson beat Isner 26-24 in the final set after a six hour, 36 minute battle - the second longest match in Wimbledon history which prompted organisers to limit final sets to a maximum of 24 games before a tie-break kicks in at 12-all to settle matters from 2019 onwards.
Federer said the ballboy had confirmed to him that he had dropped the ball.
"Look, I understand the frustration".
I said, Did you drop the ball? "When the booing was happening, it's never a nice feeling".
Of the booing incident after the Federer match he said: 'The crowd reaction wasn't too good to me, I was a little bit sad because as tennis player we take this kind of stuff personally. "I was more aggressive today", Zverev said afterwards.
Khachanov may have enjoyed his best week of career in the French capital after bettering No. 6 seed Dominic Thiem in their first meeting to reach a maiden ATP 1000 final.
"Novak right now is the best player in the world", said Zverev, who lost to Djokovic in the round robin. 'You definitely played much better than you had in the group stage.
World number one Novak Djokovic, who narrowly missed the ATP Finals title after going down to Alexander Zverev of Germany in the summit showdown, has stated that despite the loss he is proud to have a "phenomenal season" during which he reclaimed his top world ranking. I don't know, Paris or Wimbledon, whatever happened.
Djokovic had not been broken once in the tournament coming into the match, winning all 36 service games and only facing two break points but Zverev wrecked his numbers, breaking four times in the match. "I aced him after that, so that probably didn't help the situation".