Mark Williams, champion in 1998 and 2003, was appearing in his first Masters final for two decade and more than contributed to an enthralling final.
But he was unable to overcome a resilient Trump, who held his nerve to take the match 10-8 to cement one of his "best-ever" performances.
Trump had led 5-3 prior to the evening session but was forced to fight back from 7-6 and 8-7 down in a thrilling encounter.
The win sees him collect £250,000 in prize money with Williams taking home £100,000.
"It's incredible really, I got totally outplayed in the whole game I think, really. I was just trying to hang on," Judd told the BBC after his championship win.
"At 8-7 down I was kind of gone and I managed to win that frame and then I played all right in the last couple of frames.
"I should have been out first round, should have been out second round, should have lost this one. I'm like a cat I am. It's easy to say but the way I played this week this is my best-ever performance to win this.
"I wasn't playing well, a couple of times I missed balls over the pockets by an absolute mile. I didn't know what was going on and Mark's long potting was unbelievable, he put me under so much pressure but I was able to never fall two behind.
"This is by far my best-ever win."
Speaking to the BBC after the loss, Williams claimed Trump was simply too good for him on the day.
"It was a great match all the way through, I think the standard was quite good and Judd made a fabulous break in the last frame and that's what he does that's why he's one of the best in the world.
"I've got to say a big thank you to the crowd, they have been unbelievable all week, not just for me and Judd but for everyone.
"Judd was just a bit too strong for me at the end - I'm not a young man anymore but I'm still giving these youngsters a run for their money."
Trump's narrow lead at the break
Earlier Trump, winner of the 2019 tournament, made a century and two half-centuries after Williams potted a superb 138.
England's Trump had opened up a 4-1 lead but started to be pegged back by the veteran Welshman.
Williams had been touted as the favourite before proceedings at Alexandra Palace and looked to cement those claims with a fine first frame.
But Trump did not let that faze him, hitting back with a 61 before edging a nervy third frame.
He pulled ahead with his lead with a 106 and then extended to 4-1, which included a brilliant long-range red pot.
Williams began to make inroads to the lead with a century before winning the next frame, although Trump slowed the momentum to win the final frame of the first session.
