The victory marked the fourth time Nadal has won the event in as many years and brings the 21-year-old's record against Federer on the red surface to an impressive 7-1.
Federer, who has 54 career titles to his name, had the upper hand in both sets before Nadal broke back, coming from 4-0 down in the second to record a memorable 7-5 7-5 triumph.
While bowing to his rival's clay court supremacy, Federer insisted he feels confident of competing with Nadal in the Spaniard's favourite conditions.
The Swiss said: "Rafa plays compact and tough and the clay court is so natural for him.
"He's improving but so am I. It won't get any easier to beat him but I feel I'm right there."
The top two in world tennis are likely to feature heavily in the climax of the clay season at the French Open starting on May 26th.
Nadal has proved to be Federer's nemesis on clay, twice preventing him from completing a clean sweep of all four grandslams by winning at Roland Garos in 2006 and 2007.
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