The World No. 3 won a rain-interrupted BMW Open by FWU AG final, carried over from Sunday due to rain, with a 7-6(4), 5-7, 7-6(4) victory over two-time former champion Philipp Kohlschreiber. The match lasted three hours and four minutes.
Murray, who improved to 32-16 in tour-level finals, received €80,000 in prize money and earned 250 Emirates ATP Rankings points. The Scot was also presented a BMW i8, plug-in hybrid vehicle, and Bavarian traditional costume (Lederhose, leather trousers).
He is the first British player to win a clay-court singles title since Buster Mottram at 1976 Palma.
"It means a lot to have won," said Murray. "It was my first final on the clay, having lost a few semi-finals at Roland Garros, Rome and Monte-Carlo. We played a very high standard match. I just managed to hang on at the end.
"He served unbelievably well. I had very few chances when I was returning. We may even play one another in Madrid, in a few days' time [this week]. Philipp is a superb competitor and fought right to the end. It is nice to have won my first clay title and I hope to win another one soon.
There were no break points in the 58-minute opener, which resumed with top seed Murray serving at 2-3. Overall, Murray won 24 of his 28 first service points, while fifth seed Kohlschreiber won 21 of 23 in the first set.
In the second set, Murray saved two break points in a 16-point third game. Murray and Kohlschreiber then exchanged service breaks, prior to Kohlschreiber bouncing back from 0/40 at 3-4.
Kohlschreiber broke Murray to 15 for a 6-5 lead, as the match edged closer to the two-hour mark. One hour later, in a tense tie-break, the duo remained locked until Murray won four straight points from 2/3. Murray hit 17 aces to Kohlschreiber's 11 during their fourth meeting. He is now 5-0 lifetime in ATP World Tour finals that have decisive set tie-breaks.
"It was a great atmosphere and a great crowd," Kohlschreiber told ATPWorldTour.com. "We both gave everything. It was so close, but at the end there has to be one winner. Unfortunately, for me, it was Andy. It was a fantastic game."
Kohlschreiber, who has now lost his past 13 matches against players in the Top 5 of the Emirates ATP Rankings, picked up €42,100 and 150 points. He won the Munich title in 2007 (d. Youzhny) and 2012 (d. Cilic), and was also the runner-up in 2013 (l. to Haas).
"It was a very special moment for me, in front of a home crowd," added Kohlschreiber. "I think I pushed Andy to the limit. We had some unbelievable points. I think, for the spectators who came, it was one of the best Munich finals.
"Munich is always very special. It is my best tournament on the tour. I love playing here and on the clay. I don't want to watch the match tomorrow, but I enjoy playing clay-court tournaments. This gives me a lot of confidence for the future."
Almost 12 months ago, at Roland Garros, Murray beat Kohlschreiber in a 12-10 fifth set in the third round.
Both players will travel to the Mutua Madrid Open later today.