The 30-year old Penangite went down in the first two sets before clawing back to win 8-11, 6-11, 11-7, 11-7 and 11-8 against second seed and world number three, Raneem El Weleily of Egypt.
The final was held at the Lujiazui Central Park in Shanghai, according to the tournament website; www.squashsite.co.uk.
On her victory, Nicol who has three titles under her belt this season (Malaysian Open, Carol Weymuller and the United States Open) said she was happy to have won the tournament for the first time.
"I had a really good run in the China Open. The game went into a decider today and I was really glad to pull it off 3-2. Thank you all for your support! Shanghai is gorgeous!," she was quoted as saying in her twitter.
The win saw seven-times world champion Nicol extending her winning record against the 24-year old Egyptian to 12-2.
Raneem had earlier defeated national women's number two player and defending champion, Low Wee Wern in a quarter-final match on Friday.