The victory ends Li's run of three defeats in finals this year, including a loss to Petra Kvitova in Montreal last week, and is a major boost for her ahead of the US Open later this month.
The 30-year-old Li's win was her sixth career title and her first since her French Open triumph last year and came after the Chinese teamed up with Argentine Carlos Rodriguez, the coach of multiple grand slam winning Belgian Justine Henin, earlier this week.
Li won nine straight games from a set and a game down to take the second set and then a 3-0 lead in the third and she gave plenty of credit to her new coach.
"Thanks Carlos, you are good," she said during the prize-giving ceremony.
"I think we have a good beginning to our work. Before the match we talked a lot about yesterday's game and also about today," she told reporters.
"Working with him I feel more comfortable, relaxed, not stressful."
Li consulted with Rodriguez after the first set where she had failed to break through Kerber's solid defence.
"He told me to concentrate on my own game and some other things. He's my secret weapon," she said.
Kerber, looking for her third title this year, appeared shell-shocked by the turnaround and was close to tears during discussions with her coach.
The 24-year-old said she had become emotional during the run of games where she couldn't find a way to deal with Li.
"She was playing so well. I tried to hit the ball deep but she was bringing back every ball and also playing the ball so deep herself, so I couldn't do anything," Kerber said.
"I tried, I gave all I could but it was not enough to win."
- Petra Kvitova