Selby claimed a cheque of £125,000 for the tournament win, a record prize fee for the championship, while Murphy collected £50,000 as runner-up.
The two finalists could not be separated in their initial eight-frame session, and after the first four of the evening remained tied at six wins each.
"I am over the moon and it means a great deal. It makes it even more special to beat someone of Shaun's class," Selby said.
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"It was a strange game, it was not pretty. I was twitching all over the place.
"I never really give in until the last ball is potted and that is me all over. If I was not like that, I would not have got to the final."
Murphy began with a brilliant 65 clearance to steal a 5-4 lead despite Selby's early run to 58, but the Leicester man took a scrappy 10th and used a 46 break to edge the 11th to turn the see-saw final back around.
Murphy used two 30+ breaks to seal the 12th and level once again, but it would be his last frame of the contest and the end of their all-day parity.
The 2008 UK title-holder failed to capitalise on several chances to punish Selby mistakes, and an aborted comeback attempt following a Selby 51 was followed by 'The Jester', matching his friend's earlier 98 break for his first two-frame advantage of the match.
An inexplicable missed blue was Murphy's biggest chance to stop the rot after Selby recorded a spell of 44 in frame 15, and after Selby moved three clear he held off a late Murphy attempt to force snookers to seal the match and the title.
First session report:
Mark Selby and Shaun Murphy shared four frames apiece in the opening session of their UK Championship final at York's Barbican Centre.
The world number one and world number four split the opening eight frames of their final, with Selby taking the final two to avoid allowing 2008 winner Murphy to run away with a sizeable lead.
'The Jester From Leicester' returns to the summit of the rankings at the expense of Judd Trump by virtue of making the final in York, and is aiming to win the second-biggest tournament of the snooker season for the very first time.
The two Englishmen slowly found their break-building groove as the session wore on, with Murphy grinding his way to the opening frame before Selby's 54 made it 1-1 after 'The Magician' went in-off at 43 whilst trying to double his advantage.
Selby then added a run to 66 to get his nose in front, only for Murphy to rack up a 83 break to keep the two men neck-and-neck heading into their 15-minute mid-session interval.
The brief break from the baize did not quell Murphy's momentum, however, and a 98 clearance was the closest the afternoon session came to seeing a century break.
A freakish series of fortunate occurrences allowed the 2005 world champion to create a two-frame chasm for the first time, as a fluked final yellow and equally unplanned snooker on the brown stumped Selby's fight-back attempts.
But Selby would have the last laugh, pulling the seventh frame back with a knock of 76 for 4-3 before two 30+ visits in frame eight were enough to close proceedings at 4-4 from 4-2 down.
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