The 28-year-old Dolgopolov, who took one hour and 40 minutes to win the final at the Buenos Aires Lawn Tennis Club, earned his first victory over the Japanese world number five at the sixth attempt.
Dolgopolov, the world number 66, lifted his third career ATP title by going through the claycourt tournament without dropping a set.
"I'd never won even a set against Kei, let alone a match. I'm really happy to have done so," Dolgopolov told reporters.
"I played really well and I'm at my best level for the last two years. I'm really glad to be back."
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The Ukrainian, whose previous crown came at Washington in 2012, the year of his career-high ranking of 13th, went toe-to-toe with Nishikori in a long first set that he clinched 7-4 in the tiebreak with his second set point.
He then broke his opponent for the first time when they were 3-3 in the second set with a winner from his potent backhand and went on to take victory with his first match point.
Top seed Nishikori was looking for a 12th title, having won his last at Memphis last year, and now moves on to the Rio Open with Dolgopolov.
The Japanese said he still had some way to go to take his ranking higher. "I'd have to improve several things (in my game)... be more consistent week in week out," he said.
Dolgopolov ended a run of seven successive Argentina Open triumphs by Spanish champions in Buenos Aires as he succeeded last year's winner Rafael Nadal.
(Reporting by Luis Ampuero; Writing by Rex Gowar; Editing by Ian Chadband)
