Lars Stindl's first-half goal following a costly error from Marcelo Diaz came against the run of play and proved decisive for the world champions at St Petersburg's Krestovsky Stadium, where Chile failed to force an equaliser during a tight second period.
A first triumph for Germany in the competition, which traditionally serves as a dress rehearsal for the subsequent year's World Cup, is a testament to Joachim Low's ingenuity in selecting a team of hungry youngsters with something to prove, and may leave many members of the established first team facing a tough battle to retain their place in the squad at 2018's main event.
The result will come as a disappointment to Copa America holders Chile, who should have had enough guile and experience to come away with the trophy against a young team who struggled to match them in a 1-1 group stage draw.
The attention of coach Juan Antonio Pizzi now turns to CONMEBOL World Cup qualifying, in which Chile are fourth, one point ahead of Argentina, as they seek to ensure they return to Russia on the big stage in 11 months' time.
A rampant Chile dominated the opening exchanges, with Antonio Rudiger required to deny Charles Aranguiz inside the area in the fifth minute and Marc-Andre ter Stegen keeping out Arturo Vidal's follow-up effort.
Eduardo Vargas and Mauricio Isla both had Ter Stegen and the Germany defence worried in the subsequent 15 minutes, while Alexis Sanchez narrowly failed to put away the rebound when the Barcelona goalkeeper could only parry a firm Vidal strike.
It was Germany, though, who broke the deadlock, benefiting from a Diaz mistake to open the scoring against the run of play in the 20th minute. Attempting to turn under pressure on the edge of his box, the Celta Vigo player inadvertently gifted possession to Timo Werner, who forced goalkeeper Claudio Bravo to commit before squaring the ball for Stindl to pass into an unguarded net.
To their credit, Chile were undeterred by going behind and immediately resumed pressing Germany in advanced areas and at a furious tempo, albeit without creating clear scoring opportunities.
They were nearly punished again on the counter when Julian Draxler and Sebastian Rudy combined to play in Leon Goretzka down the right side of the area, the Schalke midfielder firing across Bravo and wide of the far post as Chile's all-action approach repeatedly left them exposed at the back.
Another defensive mishap could have proved fatal when Gonzalo Jara played a pass straight to Draxler on the stroke of half-time, but Goretzka opted not to take a first-time shot with his left foot and Chile survived.
The frenetic pace of the opening half gave way to a cagey affair after the break, and it took until the 55th minute for a good chance to arrive, Isla's block preventing Draxler from getting a shot on target after the Paris Saint-Germain star drove powerfully into the area.
FIFA's new Video Assistant Referee (VAR) system, a contentious feature of the tournament due to its seemingly inconsistent application and the questionable decisions it has prompted, came under the spotlight again shortly after the hour mark. Jara's nasty elbow against the jaw of Werner, initially missed by match official Milorad Mazic, saw the Serbian somehow only produce a yellow card following a review of what appeared to be an incident warranting a straight red.
Having narrowly avoided going down to 10 men, Chile began to apply sustained pressure and missed a glorious chance to equalise in the 85th minute. Edson Puch snuck in to steal the ball from in front of Ter Stegen and cut it back to fellow substitute Anyelo Sagal, who blazed wildly over the bar.
Tempers flared in the 90th minute when Emre Can became embroiled in a confrontation with five Chile players after bowling over Sanchez, Bravo rushing from his goal to become involved, as did Low from the touchline.
Ter Stegen had to be alert five minutes into stoppage-time, parrying clear a 25-yard Sanchez free-kick to deny Chile from the game's last sight of goal and make sure of Die Mannschaft's unexpected triumph.