Sunday’s match between No. 37-ranked Hubert Hurkacz and No. 31 Jannik Sinner was the first ATP Masters 1000 final since 2003 with two players ranked outside the top 30.
The 33-year-old Djokovic had risen to the top of the ATP Rankings for the first time in July 2011.
The 33-year-old Serbian reclaimed the top spot from Spain's Rafael Nadal in February 2020.
Novak Djokovic is now going to prioritise the Slams to catch up with Rafael Nadal and Roger Federer.
Djokovic overpowered the fourth seed 7-5, 6-2, 6-2 in front of 7,400 fans on Rod Laver Arena to end the Russian's unbeaten run at 20 matches.
Facts and figures ahead of Sunday's Australian Open men's final.
The No. 1-seeed Djokovic is 17-0 in Australian Open semifinals and finals, making him nearly as much of a lock on the blue hard courts of Melbourne Park.
He is also unbeaten in all nine semifinals he has contested in Australia.
Djokovic is closing in on a ninth championship in Australia, which would add to his own record for a man. And an 18th Grand Slam title overall, two fewer than rivals Roger Federer and Rafael Nadal.
He planned to have medical tests done to “understand what’s really going on” after hurting himself while losing his footing during his 5-set victory over Taylor Fritz in the third round Friday night
Australian Open: Frances Tiafoe puts up spirited fight, but Novak Djokovic progresses to third round
Djokovic outclassed America's Frances Tiafoe 6-3, 6-7, 7-6(2), 6-3 to win the second-round match at the Rod Laver Arena.
Djokovic said in Melbourne over the weekend he had mixed views on Kyrgios, who recently called him a 'tool', respecting his tennis abilities but not his off-court antics.
Djokovic claimed his 17th Grand Slam crown in last year's gripping final, when he came back from 2-1 down to edge Austria's Dominic Thiem in five sets.
Five men's singles players to watch at the Australian Open Grand Slam tennis tournament, which starts on Monday after a three-week delay over the coronavirus.
Alexander Zverev bounced back after a tough singles defeat to Novak Djokovic to send Germany into the ATP Cup semis.