Thiem saw off top-seed Gael Monfils in the semi-finals and he eased past Portugal’s Sousa in just 61 minutes to claim his second career title after victory in the Open de Nice in May.
Both players held serve until the seventh game of the first set, when a string of clever drop shots from Thiem led to him breaking his opponent.
He then won seven of the next eight games with Sousa unable to regain a foothold in the contest, as Thiem made just 11 unforced errors, compared to 26 by Sousa.
The Austrian’s only slip came as he was serving for the match at 5-0 when three unforced errors saw him lose his serve but he broke straight back to close out the win in front of world No 1 Novak Djokovic, who was watching on from the stands.
“Today was a very special day. We were watched by world’s number one Novak Djokovic,” Thiem said.
“Usually he is the one who entertains us with great tennis and today we turned it around.
“This tournament is really special for me. I played many times here as a junior and dreamed that one day I will be able to play here in full stadium at night.”
Thiem and Sousa have now met three times in their careers, with Thiem claiming victory on all three occasions.
Djokovic, in Croatia on holiday after winning the Wimbledon crown, was also enjoying his time in Umag, having last played the tournament in 2006.
“I came in the name of all distant memories… now that I’m here as a spectator in a shirt, I’m starting to get nostalgic,” he said.
“I’m drawn by the tennis, the racket is calling to me. Before I finish my career, I’ll definitely come back and play another tournament in Umag.”