The Swiss world number one overcame dropping the opening set against the rising 54th-ranked star to claim a 5-7, 7-5, 6-0, 6-2 victory in 2hr 46min to remain unbeaten in all the Grand Slam finals he has contested since his first success at 2003 Wimbledon.

Federer became the first player to win three successive Grand Slams since Pete Sampras won at the 1994 Australian Open. The Swiss went into this year's Open having won last year's Wimbledon and US Open.

He now joins other tennis greats John McEnroe, John Newcombe and Mats Wilander with seven major titles and is closing in on all-time leader Sampras with 14.

It was the 24-year-old's 35th title and his fourth win over 20-year-old Baghdatis, who beat three top-10 players to reach his first Grand Slam final and only second tour final overall.

Federer pocketed 900,000 US dollars for his Australian victory, swelling his career prizemoney to 21,274,573 US dollars.

Baghdatis was bidding to become the first unseeded player to win the Australian Open since 212-ranked Australian Mark Edmondson won here in 1976 and his ranking has now climbed to 26.