The 22-year-old Garin, who is part of the ATP's next generation of stars, beat Ruud 7-6 (7/4), 4-6, 6-3 and becomes the first Chilean to win an ATP Tour title since Fernando Gonzalez in 2009.
"Casper is a great player I am sure we will play many more finals against each other," said Garin, who improved his clay court record to 11-3 in 2019. "This is my favourite tournament now and I hope to come back next year."
Garin also won their only previous career meeting last month in Sao Paulo, Brazil and earned his first title in just his 11th career tournament.
Not only did Garin pick up the winner's check Sunday but he will play in his first French Open next month in Paris.
Garin reached the final by defeating American Sam Querrey 7-6 (7/2), 6-2. But his road to the final wasn't easy. He was pushed to three sets in his opening match against Pablo Cuevas of Uruguay and saved five match points to defeat second seed Jeremy Chardy of France in the second round.
Ruud, 20, was seeking to become the first Norwegian to win an ATP Tour title. Ruud's father, Christian, was the last player from Norway to reach an ATP Tour finishing runner-up in 1995 at Bastad, Sweden. Christian Ruud competed on the Tour for a decade.
Like Garin, Ruud has been impressive on clay this season. He reached the quarter-finals in February at the Rio Open and then advanced to the semi-finals at the Brazil Open.