World number 44 Mannarino, who beat Croatian second seed Borna Coric in a rain-hit semi-final earlier in the day, broke Thompson early on but surrendered his advantage at 3-2 in the opening set, which was decided by a tiebreak.
Facing two set points at 4-6 in the tiebreak, the Frenchman capitalized on multiple forehand errors by Thompson before clinching the opener with a backhand passing shot on the run.
Mannarino raced to a 3-1 lead in the second set, as Thompson struggled to control his forehands and later held to love at 5-3 to clinch the title.
The triumph completes an impressive week for Mannarino on the Rosmalen grass courts as he overcame fourth seed Fernando Verdasco and fifth seed David Goffin, before a final set tiebreak win over Coric.
"People are going to stop talking [about my finals record]," said Mannarino. "In France, we have another player, Julien Benneteau, who lost 10 finals and never won a title. Every time I was losing a [final] I was on my way to Benneteau.
"This is a big achievement for me. I am not pretending to be Top 10 or anything. Winning a title on the ATP Tour level is already something amazing for me and I cannot be more thankful to all the people who helped me get to this title."
For Thompson the loss did come with a silver lining with his ranking projected to rise to 46, making him the third-ranked Australian behind Alex de Minaur, who he beat in the quarterfinals and Nick Kyrgios.
"I'm feeling disappointed to lose in that final, but I am very happy to make my first final," Thompson said. "It was a great week for me. I really took advantage of playing well on the grass.
"It is disappointing to lose in the final, but a great week nonetheless."