Malaysia had entered the second-leg as favourites for the title on the back of a 3-0 lead from the first-leg.
However, things could have become tense for the eventual champions if Indonesia's Firman Ultina had managed to convert his 19th minute penalty.
Malaysia stopper Khairul Fahmi Che Mat managed to pull off a save and the tie was all but over when Safee Sali scored for the away team - his fifth strike of the tournament.
Egged on by 80,000 supporters, including president Susilo Bambang Yudhoyono, Indonesia had started the stronger of the two sides with Irfan Bachdim going close in the 17th minute.
Referee Peter Green then awarded Indonesia a spot-kick after spotting a handball in the Malaysian penalty area. However, Firman, who was later named the tournament's most valuable player struck a weak shot straight at the keeper.
This was to be the story of the first-half as Alfred Riedl's men continued to go close without scoring. Cristian Gonzales was in the thick of action and nearly scored twice before the first-half ended.
Malaysia, with a three-goal cushion backing them up, were content to soak up the pressure and search for counter-attacking opportunities. The tactic paid rich dividends early in the second-half when they gave away possession near the half line.
Norshahrul took advantage of the slip-up to put Safee through. The tournament's leading striker outpaced the Indonesian defence before smashing the ball into the top corner. 1-0 to the away team and a monumental task confronted Firman and his men.
Although they tried gamely, scoring first through Nasuha and then through Ridwan (via a deflection), scoring three more goals proved to be beyond them.
It was a desperately disappointing outcome for the home side - this being the fourth occasion when they had stumbled at the final hurdle. For Malaysia manager K Rajagobal and his charges, it was joy unconfined as they lifted the title for the first time ever.