The 31-year-old Spaniard assured himself the world No.1 ranking by beating Hyeon Chung 7-5 6-3 in the second round of the Paris Masters.
The News Agency of Nigeria reports that it is his fourth time of finishing atop the rankings, adding to 2008, 2010 and 2013.
"I'm very, very happy for everything", he said on court following the victory over Chung.
Because Roger Federer withdrew from the tournament, this result means that Nadal has clinched the year-end #1 ranking for the fourth time in his career.
'I'm happy to achieve the year-end world No. 1 here in Paris'. It's been an incredible year, ' he said after the match.
Nadal made the decisive break in the eighth game of the second set and bagged a straightforward win on his second match point when 21-year-old Chung sent a forehand long.
"It is something that means lot to me".
Goz's College Football Top 25 Poll (Week 10)
This year, Alabama and Georgia are widely expected to be ranked at the top two spots when the first rankings come out on Tuesday. I would expect to see some 1 losses teams ( Oklahoma and Ohio State ) ahead of some undefeated teams (Wisconsin and Miami ).
The 16-time Grand Slam champion completed his rise back to world number one for the first time in over three years in August.
Another home player, Lucas Pouille, kept his slim hopes of reaching London alive by seeing off Spaniard Feliciano Lopez 6-3, 6-4, but US Open runner-up Kevin Anderson's chances ended with a 5-7, 6-4, 7-5 loss to Fernando Verdasco.
Nadal will next face Pablo Cuevas in the last 16 on Thursday, after the unseeded Uruguayan edged out Albert Ramos-Vinolas 6-7 (5/7), 7-6 (7/1), 6-2.
The Rome Masters and Montreal Masters champion fell to Dutchman Robin Haase in a 3-6, 6-2, 6-2 second-round defeat.
Bulgarian world number eight Grigor Dimitrov, who has already booked his ticket for the Tour Finals, knocked out French favourite Richard Gasquet with a straightforward 6-4, 6-4 win.
Federer is skipping Paris after winning back-to-back titles in Shanghai and Basel and is resting to be prepared for the ATP Finals starting in less than a fortnight in London.
A 10th French Open title at Roland Garros followed in June, before he claimed his first Grand Slam crown away from his favoured clay in four years at the US Open.