Batting first Peshawar Zalmi scored 148 runs for the loss of nine wickets in stipulated 20 overs.
In response the Islamabad United achieved the target in 16.5 overs with the loss of seven wickets.
Luke Ronchi with 52 runs and Sahibzada Farhan with 44 runs remained the main scorers for Islamabad United.
Radio Pakistan had made special arrangements to broadcast live the cricket commentary on the thriller from National stadium Karachi.
Tight security measures were in place for the PSL final with a huge crowd of spectators present at the National Stadium Karachi.
Prime Minister Shahid Khaqan Abbasi who is the chief guest on the occasion is present in the National stadium and is enjoying the revival of international cricket in Karachi after nine years.
Governor Sindh Muhammad Zubair, Sindh Chief Minister Syed Murad Ali Shah, Governor KP Iqbal Zafar Jhagra and DG ISPR Major General Asif Ghafoor are also among the prominent dignitaries witnessing the match.
Earlier, a colorful and entertaining closing ceremony was held in the stadium.
Addressing the ceremony, PCB Chairman Najam Sethi thanked the law-enforcement agencies, federal and Sindh governments for making the holding of the PSL final in Karachi a reality.
The PCB chairman said the tournament did not belong to any political party, leader or state institution, but to the people of Pakistan.
He said it is because of sacrifices rendered by law enforcement agencies that the city is safe today.
PCB Chairman on the occasion announced that West Indies team will visit Karachi next month.
Strings Band, Ali Zafar, Shahzad Roy, Farhan Saeed and Aima Baig performed during the ceremony.