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The Serb, 28, won 6-1 7-5 7-6 (7-3) to claim his sixth Melbourne title, tying the record of Australia's Roy Emerson.
Djokovic also draws level with tennis greats Bjorn Borg and Rod Laver on 11 Grand Slam titles.
Second seed Murray, 28, has now lost all five Australian Open finals he has played, four of them against Djokovic.
The Scot becomes only the second man - behind his former coach Ivan Lendl at the US Open - to lose five finals at the same Grand Slam since the open era began in 1968.
He was expected to head straight to the airport after the final to return to London and his wife Kim, who is due to give birth to their first child in the next two weeks.
Djokovic has now won four of the past five major tournaments, including three in a row, and will try to complete his career Grand Slam with a first French Open title in June.
Murray: "I feel like I've been here before. Congrats Novak. Six Australian Opens is an incredible feat. The last year has been incredible. Good job.
"I'd like to thank my team for getting me to this position. Sorry I couldn't get it done. Thanks for all your support during a tough few weeks off court.
"And finally to Kim, my wife, who is going to be watching at home. You've been a legend. I'll be on the next flight home."
Djokovic: "I need to pay respect to Andy for having another great tournament. Tough luck tonight.
"He's a great champion, great friend and a great professional who I'm sure will have many more chances to win this trophy.
"I also wish you and Kim good luck for the birth of your child and I hope you will experience a feeling like no other before - that's what happened to me and my wife. I wish you all the best."
Murray fought hard after a wretched start but ultimately could not cling on to the pace set by Djokovic, who has suffered just one defeat in six years on Rod Laver Arena.
The British number one came back from a break down in an 80-minute second set, and again in the third, before succumbing to an 11th loss in 12 matches against Djokovic.
Murray needed to make an early impression but Djokovic saved an early break point and then raced 5-0 clear as the Scot made a succession of errors.
It took 24 minutes for Murray to finally get on the scoreboard but the set was soon gone and he was faced with successfully recovering a deficit for the first time in 31 meetings with Djokovic.
Murray was still under pressure as the second set developed and hauled his way through a gripping 12-minute game at 1-1, giving him a foothold in the contest.
Some harder hitting brought success, only for costly errors to keep tripping up the Briton at crucial moments - and Djokovic looked to have made a decisive move when he broke again for a 4-3 lead.
It prompted a recovery from Murray, who powered his way to a break-back point in the following game and converted with a terrific backhand winner onto the line.
At last it was Djokovic who was berating himself rather than the Scot, but with a tie-break looming at 5-5 the five-time champion produced a burst of brilliance that took the match away from Murray.
Murray was in charge on serve at 40-0 only to crumble under a spectacular display of hitting from his opponent, who reeled off five straight points, including one stunning 36-stroke rally.
The Serb showed an unexpected fragility as two successive double faults offered Murray a lifeline in the next game, but he recovered with a good serve and closed it out thanks to three straight errors across the net.
There was still plenty of fight in the challenger and Murray roused himself to come back from a break down at the start of the third and force a tie-break.
It proved a reflection of the match as a whole, though, as Murray started poorly with two double faults and was out of touch by the time Djokovic sealed victory with an ace after two hours and 53 minutes.
Pat Cash, former Wimbledon champion, on BBC Radio 5 live: "Andy needed to be more intense. Players have to realise that Djokovic blows through the players with deep powerful hitting. You're forced into errors and the set's gone.
"Murray needed to be on the ball and he wasn't. Murray has improved since last year, but so has Djokovic. He's become tougher to beat under pressure."
Russell Fuller, BBC tennis correspondent: "Allowing Djokovic a 6-1 head start is like giving Usain Bolt a 10m start in a 100m sprint. Djokovic played another immaculate first set but Murray was very sluggish and only discovered his best when he went a break down midway through the second set.
"Murray attacked gloriously and his net play become more of a threat as he broke back and got to within two points of squaring the match. But Djokovic did not offer any encouragement. He was again magnificent all night long: too consistent and too strong for even the second best player in the world."
World number one Novak Djokovic beat Andy Murray in straight sets to win his sixth Australian Open title and condemn the Briton to a fifth final defeat.