Defending champion Federer, who has now won Halle more times than any other tournament, captured his fourth title of the year after victories in Istanbul, Dubai and Brisbane to take his career haul to 86.
"It is a special moment for me, to win this tournament an eighth time," the 17-times grand slam winner said courtside. "I have always enjoyed amazing support here all these year. I always enjoy it here and it is one of my favourite events.
"2013 was difficult, 2014 was better and now 2015 after this week is even better and I hope I can keep it up," he said with Wimbledon starting on June 29.
Image credit: Imago
The Swiss top seed, who has won Wimbledon and Dubai seven times, saved two set points on his serve when he trailed 5-4 in the first set. He dug deep to level for 5-5 in his 10th final appearance in Halle.
He then crushed the Italian in the tiebreak, losing only one point, to take the first set.
Seppi, who reached his second final of the year after Gael Monfils and second seed Kei Nishikori retired in his two previous matches, earned another break opportunity at 2-2 but he sent a backhand into the net.
World number two Federer then squandered three breakpoints at 4-3, allowing Seppi to hold on and win the 10-minute game.
He did everything right, however, two games later to earn two match points and finished off the contest with a spectacular overhead smash.
"I will be here next year," Federer told the crowd. "I will work had and hopefully I will stay fit and be back."