Nineteen-year-old Holger Rune became the third youngest champion in Munich after Guillermo Perez-Roldan won at age 17 in 1987.
The grasscourt Grand Slam is the first tennis tournament to ban individual competitors from the two countries, drawing a sharp reaction from the world number one player.
The victory was Novak Djokovic's second record in as many days after he was confirmed as season-ending world number one for a seventh time.
Medvedev will face fellow Russian Andrey Rublev in Saturday's semifinals after beating Pablo Carreno Busta.
World number-two ranked Daniil Medvedev of Russia beat John Isner of the United States 6-2, 6-2 in the National Bank Open semifinals to face American Reilly Opelka in the final.
Daniil Medvedev, ranked second in the world, has 11 ATP Tour victories, winning this year in Mallorca and Marseille. Meanwhile, Stefanos Tsitsipas ended the 13-match win streak of Casper Ruud with a clinical 6-1, 6-4 win to also reach the semis.
Electronic line calling technology was also deployed at the Australian Open, a move largely welcomed by players.
Seventeen-time Grand Slam winner Novak Djokovic didn’t appear for the first set against young Italian Sinner at an exhibition in Adelaide, just hours after emerging from a two-weeks quarantine.
The ATP said the men’s qualifying for the season’s first Grand Slam tournament is being moved to Doha, Qatar, from January 10-13.
Russian Medvedev, who has won nine matches in a row, beats Spanish Nadal, world number two, 3-6, 7-6 (7/4), 6-3 during their ATP semi final match.
Spain's Rafael Nadal advanced to the semifinals at the ATP Finals for the first time in five years after knocking out the defending champion Stefanos Tsitsipas.
Djokovic tied Rafael Nadal’s record by earning his 35th title at a Masters 1000 tournament, overcoming a sluggish start to beat Milos Raonic 1-6, 6-3, 6-4 in the Western & Southern Open final and improve to 23-0 this season.
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