It is the fourth time the Spaniard, who started the season ninth in the rankings, has achieved the feat after 2008, 2010 and 2013.
Rafael Nadal secured the year-end world number one ranking with a 7-5, 6-3 second-round victory over South Korean Hyeon Chung at the Paris Masters on Wednesday.
The 16-time Grand Slam champion is the oldest man to finish a season at the top of the rankings at the age of 31, after a year that saw him win the French and US Opens.
“Of course it was not the goal (at the start of the season),” Nadal told a press conference.
“It was impossible for me to think about that when you are coming back from a tough period of time without playing tennis and with so many injuries in last couple of years.
“But yes, here we are, (it) happened. And very happy of course. Means a lot, no? After almost 10 years since the first time that I finished the year with this number.”
Nadal went into the match knowing victory would give him an unassailable lead as world number one over old rival Roger Federer, after the Swiss legend withdrew before the start of the Paris tournament.
The 21-year-old Chung put up a brave fight, but a fired-up Nadal proved too hot to handle.
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.
Victory in Sunday’s final in Paris would see Nadal move clear of Novak Djokovic with a record 31st Masters crown.
“I am on a good dynamic, playing well the whole season,” Nadal, who has only won two of his 75 ATP titles indoors, added.
“There’s no comparison to play, for example, in the US Open indoor or playing here. It’s a completely different thing.”
Nadal made to work hard
Chung sent out an early warning of his intent with a ripping forehand winner to break Nadal in the third game.
The top seed responded, though, taking the next four games to open up a 5-2 advantage.
Nadal was broken when serving for the set as Chung hit back, but the turning point came as the world number one saved a break point in game 11, marked with a trademark fist-pump.
Chung’s inexperience showed at the vital moment, as he threw away his serve to hand Nadal the first set after an hour of play.
Any thoughts of a quick end to the match were set to one side when Chung staved off four break points early in the second set.
The world number 55 has enjoyed a breakthrough season in 2017 and will play at the inaugural Next-Gen Finals in Milan later this month, but his resistance was finally ended in the French capital as Nadal broke to move within a service hold of victory.
And he closed it out with the minimum of fuss to add another piece of history to his illustrious career.
Earlier on Wednesday, fourth seed Alexander Zverev was dumped out by Dutchman Robin Haase in a 3-6, 6-2, 6-2 second-round defeat.
The 20-year-old German lost his composure after easing through the first set, as his bid for a third Masters title of the season was abruptly ended.
Former US Open champion Juan Martin del Potro gave his World Tour Finals bid a boost with a 6-2, 6-2 win over Joao Sousa.
The 13th-seeded Argentinian needs to reach at least the semi-finals to take the eighth qualifying spot from Pablo Carreno Busta, who was dumped out by French wildcard Nicolas Mahut on Tuesday.
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.