The Belgian wildcard displayed stunning form on the Challenger Tour last month, winning three consecutive events, and extended his winning streak to 20 matches by defeating Thiem 4-6 6-1 6-3 in Austria.
In securing the ATP 250 clay-court title on Saturday, Goffin became the first Belgian winner on the World Tour since Xavier Malisse triumphed in Delray Beach seven years ago.
However, he was made to work hard by Thiem, who was hoping to end a 21-year wait for a home champion in Kitzbuhel.
Thiem, at 20 the youngest finalist on the main tour this season, broke serve in the first game of the match and maintained his lead to move in front.
The world number 50 spurned two set points on the Goffin serve when 5-3 ahead, but recovered his composure superbly with a love service game.
Goffin then seized control, though, reeling off seven games in succession to take the second set and secure an early advantage in the decider.
Although Thiem dug in, carving out an opportunity to break back in the sixth game, his opponent was not to be denied.
The in-form Goffin saw out the match in style by breaking to love and is now set to move back into the top 50 of the ATP world rankings when the updated list is released on Monday.