Djokovic, the Australian Open, Wimbledon and US Open winner in 2011, took top spot for the first time in his career when he deposed Nadal as All England Club champion in July.
The Serb, who was forced to skip the Shanghai tournament because of a back injury, is the 16th player to take the year-ending top spot since the world rankings were introduced in 1973.
Djokovic is the first player other than Roger Federer (2004-07, 2009) or Nadal (2008, 2010) to finish number one since American Andy Roddick in 2003.
He will be officially crowned as the year-end number one at a special trophy presentation at the season-ending ATP World Tour Finals in London, where he will be competing for a fifth straight year.
The tournament takes place from November 20-27.