The Serb won 7-6 (7/5), 6-7 (4/7), 6-3, 6-0 in three hours 39 minutes to stretch his formidable record on the Melbourne hardcourts to winning five from five finals in eight years.
Only Australian Roy Emerson, who presented him with the trophy, has won more Australian Opens with six in the 1960s.
"I am so privileged and honoured and grateful to be standing here as a champion for the fifth time and to be in the elite group of players with Sir Roy Emerson and Rod Laver and all the legends of our sport," he said. "It's an honour playing in front of you, thank you very much."
Djokovic has now beaten Murray in three of his four Australian final losses following earlier wins in 2011 and 2013, although the Scot mastered him in his two major triumphs at the 2012 US Open and 2013 Wimbledon.
The victory means Djokovic stays at world number one on the next ATP rankings when they are released today, with Murray moving to four from his current sixth.
"I had opportunities in the first three sets. Then in the fourth set, he was just ripping through everything," said Murray, dejection etched on his face.
The encounter
Murray put Djokovic under immediate pressure with three break points in the third game of the opening set, played in cool and windy conditions on Rod Laver Arena.
But the Serb fought back to hold after an almighty 27-stroke rally and an ace.
Djokovic struck in the next game, breaking Murray to take an early 3-1 lead.
It was hard-fought tennis and the Scot worked his way back by breaking his rival on his third break point in the seventh game.
Djokovic jammed the thumb of his serving hand when he slipped chasing a low volley and needed treatment at the next changeover.
It seemed to bother him briefly only and he broke the Scot a second time before being broken back as he served for the opening set, taking it to a tiebreaker.
The top seed trailed 2-4 in the tiebreaker but then rattled off five of the next six points to claim the opening set in 72 minutes.
Undeterred, Murray broke for a 2-0 lead in the second set before Djokovic hit back with a double break.
The final was then interrupted by a security scare for five minutes when political activists unfurled a banner in support of refugees.
One of them jumped on court with security guards ringing both players as at least four protestors were escorted out of the stadium.
The stoppage worked in Murray's favour as he broke Djokovic's service to level the set at 4-4. It went to a second tiebreak in which Murray prevailed 7-4 to level the contest.
Djokovic suffered an immediate let-down in the third set, dropping his opening service, but he stormed back with a double break to edge in front two sets to one as Murray flagged.
Fired-up, the top seed then split the final set wide open, racing through the fourth set against a spent Murray with a triple break to surge to victory.
The Serbian tennis star Novak Djokovic beats the Brit Andy Murray 7-6, 6-7, 6-3, 6-0 in a three-hour 39 minutes final to be crowned the 2015 Australian Open champion.
- Djokovic serves for his fifth Australian Open title. He leads 40-15. Double Championship points. Its over. Novak Djokovic is the 2015 Australia Open champion.
- Murray serves and Djokovic makes it 30-0. Djokovic mistimes a serve return and its 30-15. Murray carelessly backhands it past the legal line for 40-15 and then the game. Its 5-0. Murray has completely given up in the match.
- Djokovic serves. Its 40-15. Djokovic makes it 40-30 with a backhand into the nets. The Serb serves and the Brit lobs it high for a smash but Djokovic misses and its a deuce.
- Djokovic breaks Murray's serve again. He has a significant 3-0 lead in the fourth set. Can he win it right here?
- Djokovic serves. He is making Murray work hard for a comeback. The Serb goes 2-0 up.
- Murray serves for the first game of the fourth set. Can the Serb end it in this set? He wins the first game and breaks Murray's serve. Its 1-0 in the fourth set.
- Djokovic wins the third set 6-3. He lead two sets to one in the final.
- Murray serves. Djokovic goes 40-0 up. Murray serves up hot and Djokovic defends it past the legal line to make it 40-15. Murray follows up with a double fault. The Serb lead 5-3 now.
- Djokovic serves. He moves 4-3 up.
- Murray serves. He makes it 3-3 with an ace against the Serbian.
- Djokovic serves and takes a 3-2 lead in the third set.
- Djokovic breaks Murray's serve and is now on equal terms in the second set. Its 2-2.
- Djokovic pulls one game back. Its 2-1 in the third set.
- Andy Murray goes 2-0 up against Djokovic.
- Andy Murray starts the third set with a win. He goes 1-0 up.
- Andy Murray takes the second set 7-6 (7/4). Its 1-1 in the final. Djokovic seems drained out of energy. He walks out of the court.
- Djokovic is back in the match. He ties the score agains. Its 6-6 in the second set of the final. Its going be decided again on a tiebreak.
- Murray serves. He leads 6-5 in the second set.
- Djokovic serves to stay in the set. And after a long battle he is on equal terms with Murray. Its 5-5 in the second set.
- Murray lead 5-4 against Djokovic. Is he going to go for the kill now?
- Match resumes and Andy Murray is back on equal terms against the Serb. Its 4-4 in the second set.
PLAY STOPPED! Security encircles the whole ground due to some unwelcome protesters on court.
- Murray is back with a game. The score is 4-3 in the second set.
- Another game for Djokovic. He lead 4-2 in the second set. Seems like he is going for a straight sets victory against the Brit.
- Djokovic lead the second set 3-2 against Murray.
- Djokovic is on level terms now. It is 2-2 in the second set.
- Djokovic lessens the deficit 2-1 in the second set.
- Murray gains a 2-0 lead over Djokovic in the second set of the match. He is coming strong at the Serb.
- Djokovic downs Murray 7-6 (5-7) after an emphatic encounter in the first set.
Djokovic bids to remain unbeaten in Aussie final
Novak Djokovic attempts Sunday to keep his formidable record intact in the Australian Open final, while Andy Murray is bidding to end a tormenting run of three losses in the Melbourne decider.
The Serb top seed is four-from-four in Australian finals and into his fifth at Melbourne Park in eight years.
He has beaten Murray in two of the Scot's three Australian losses in 2011 and 2013, although the sixth seed mastered the Serb in his two major triumphs at the 2012 US Open and 2013 Wimbledon.
Djokovic will remain the world number one on the next ATP rankings when they are released on Monday regardless of what happens, but Murray can climb to three from his current sixth if he wins.
The Serb has won six out of his last seven encounters against Murray -- including four in a row last year — with the Scot bidding to defeat him for the first time since the 2013 Wimbledon final.
History beckons for Murray if does win, becoming the first Briton since Fred Perry in 1934 to lift the Australian trophy.
Djokovic said his recent record against the Briton was a big confidence booster going into the match, but he remains wary.
"There's no clear favourite. I think the way he's been playing, he already knows what it takes to win a Grand Slam title," he said.
"On the other hand, I'm going to try to use also my own experience and of course motivation to eventually get my hands on the title as well."
Murray, under the coaching of two-time French major champion Amelie Mauresmo, looked impressive in turning over Tomas Berdych in Thursday's semi-final, while Djokovic laboured over five sets to put away defending champion Stan Wawrinka.
"I know it's going to be extremely difficult to win the match. I know if I want to win, it will probably be very tough and challenging physically," Murray said.
"So I need to prepare myself mentally for that. But he has a fantastic record here. He obviously loves the court and the conditions. It would be a big upset if I manage to win tomorrow."
While delighted to have again reached Sunday's final, Djokovic admitted his "level of performance was not where I wanted it to be" against Wawrinka.
For his part, Murray was pleased with the state of his game and proud to be in a fourth Melbourne final in an era dominated by Djokovic, Roger Federer and Rafael Nadal.
Wawrinka had the weapons to leave Djokovic gasping at times running around the court during their semi, which must have encouraged Murray, who while regarded as a great defensive players, is looking to add more variety to his game.
Up until Friday's semi-final, Djokovic had lost just one of his 74 service games in the tournament. Against Wawrinka his serve was broken five times and that will give Murray confidence.
Murray showed he is capable of making tactical tweaks during his matches to counter his opponents and is expecting he may have to do the same against Djokovic.
"I made some big adjustments in the Berdych match from how things were going at the start," he said.
"I'll need to do the same thing again on the Sunday against Novak because things that you think will work doesn't always work out that way."
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I am glad to see that FINALLY tribune has started score streaming for tennis .. Not many in pakistan do justice with sports other than cricket