Konta, who is guaranteed a top-10 spot when the new rankings are released and is the first British woman to rise so high since Jo Durie in 1984, committed 34 unforced errors against Radwanska and struggled on serve.
The Pole finished with just eight unforced errors and wrapped up victory with an ace.
"It's a very special moment; third final and second title here. It was a really special week for me and it couldn't be any better," Radwanska told reporters.
"Every title means a lot, but especially here when you play against the best players in the world, in one of the biggest tournaments. It's top players from the first round and I've been playing my best tennis all week."
Konta, who was 146th in the world 17 months ago, has continued a remarkable rise up the rankings despite her defeat.
On her main draw debut at this year's Australian Open, Konta became the first British woman into the last four of a grand slam in more than 30 years.
She also earned her first WTA title at the Stanford Classic in July.
"I'm very pleased with my progress over the past few years and hopefully many more places to climb. I'm just working hard towards playing matches like these, against players like Agnieszka," Konta said.
Radwanska, who bowed out in the fourth round of the U.S. Open last month, also won the Connecticut Open and Shenzhen Open earlier this year and has qualified for the WTA Finals in Singapore.
(Reporting by Ian Rodricks in Bengaluru; Editing by Toby Davis)
