Starting the day with a one shot lead the 22-year-old looked solid throughout the round firing a 6-under 66 to finish with a tournament total of 18-under 270.
Having turned Professional at the end of 2012, Papadatos held of many challengers including the experienced Kiwi Mark Brown to claim his maiden victory.
Brown eventually finished the leading Kiwi, four shots behind the young Aussie disappointed that he wasn't able to end the 12 year Kiwi drought at the National Open.
A further shot back was David Klein (NZ), while Ash Hall (VIC) and Richard Lee (NZ) rounded out the top-5 on 12-under the card.
But this day was all about a coming-of-age performance from Papadatos who admitted etching his name into the Brodie Breeze Trophy hadn't sunken in yet.
He said the final few holes were all a bit of a blur as he tried to close out the victory.
"I just wanted to concentrate and not get too overwhelmed with what was happening," said Papadatos about the final hole.
When he hit the green in two and comfortably made the two-putt for par he could finally relax. He was swamped by a swagger of young Aussie Pros who showered him with champagne.
"It's awesome, great bunch of guys and they're very supportive. We all try and beat each other but at the end of the week, but there's no hard feelings."
Before today's win Papadatos' best result on the PGA Tour of Australasia was a third place finish at the ISPS Handa Perth International last October.
The champion wasn't too sure how he handled the pressure all day.
"I kept believing in myself and telling myself I could do it, the whole way round. But there's always that thing, deep down wondering if you really can."
Papadatos said it was "unreal" to follow in the footsteps of some great Aussie players "“ the likes of Peter Thomson, Kel Nagle, Peter O'Malley and Craig Parry "“ who had won the New Zealand Open.
He also followed the lead of his good mate Jake Higginbottom who won as an amateur at Clearwater in 2012.
"I didn't really think at the start of the week I would have had my name on the trophy behind him, but as the week started to progress, I thought there was a good chance so I'm pretty happy."
Papadatos believed the win, where he earned 16 World Rankings Points, status on the PGA Tour of Australasia until 2016 and three starts on the Japan Tour would be massive for his career going forward.
"Obviously some great players have won this event, it's a massive honour. I wouldn't have told you at the start of the week I was capable of this. I'm really happy."
Not feeling as upbeat was Mark Brown. He said there was little comfort in finishing second and the leading Kiwi for the second New Zealand Open in succession.
"It was just frustrating that I didn't have the A-game today like I played a couple of the other days," said the 39-year-old.
"The chances I did give myself I didn't convert and it was only really towards the end that I made a couple of birdies so Dimi played great. He holed the putts when he needed to.
"It's all about winning and particularly this tournament, so I take no solace in finishing second at all. It wasn't what I wanted so it's just really disappointing."
He was not surprised to see such a young inexperienced player handle the pressure of leading throughout the final round with so much composure. It was a sign of the times.
"The young guys now have got no fear. They all putt great, their short games are great so when they do make a mistake off tee to green they'll save it and not only that, they'll hole putts."
New Zealand amateur Jordan Bakermans finished as the leading amateur to claim the Bledisloe Cup when Southland No.1 Vaughan McCall was disqualified for signing an incorrect scorecard
"It is a huge honour to win this trophy," said the 20-year-old from the Christchurch Golf Club."It was my goal at the start of the week and while I would have loved to make the cut this is a pretty cool honour to take home from this tournament."
Meanwhile in the New Zealand Pro-Am Championship Australian Brody Ninyette and amateur Sam Hamilton claimed the title in the best-ball format despite Ninyette shooting a 13-over 85 in the final round.
They won the first NZ Pro-Am to be staged at the NZ Open by two shots from Nick Gillespie and John Bowring on a 39-under par total.