The tournament also heralded the end of the European Tour season, with Francesco Molinari claiming the Order of Merit.
Willett shot a 68 to Reed's 70 to win by two shots ahead of the American and three-time victor this season, Matt Wallace.
Willett held a two-shot lead on the 18th tee after making a birdie on the 17th, but pushed his tee shot slightly into the bank of a creek that divides the 18th fairway, and then hit a courageous second shot from the rocks before making par.
"I'm massively proud of myself", he said.
"I never thought something like this would happen to me to be honest, and now it's going to be a challenge to reset before next year and work as hard as I did the past winter and try to reproduce the same golf". "It's been tough [the past two years]".
Willett has not tasted victory since winning his first major title at Augusta in April 2016 and was outside the world's top 450 earlier this season following numerous injuries and a loss of form.
He shared the lead with Reed going into the final round, but went three shots clear with an eagle on the par-five second and then made birdie on the seventh.
"You never quite know when a win is around the corner and with all the things that have happened, I was never quite sure if it was going to happen again", he said.
"I've started pretty slowly on the first four or five holes all week - but I got off to a quick one today".
Molinari finished in a tie for 26th, but Tommy Fleetwood's failure to win the event - ending the weekend in 16th - was enough to see the Italian end the season as Europe's number one golfer. "I'm not going to lie, it would be an incredible thing to win, but regardless of what happens, just looking more in the long-term of my career, really, is pretty good". Not a lot that was good had happened to him as far as his golf was concerned in the 953 days since then.
Englishman Fleetwood, 27, who needed to win at the Jumeirah Golf Estates to overtake Molinari in the European Tour's money list, finished with a final-round four-under 68 to end tied for 16th on 10-under 278 overall, eight shots behind eventual victor Willett.
"Carnoustie was really not my favourite place, to say the least, before this year, and to go there and win it's incredible and it's probably impossible to process all of that".
"I'm really struggling for words".
"It's just an incredible achievement again". Now it's so nice to be playing my sixth week out of seven feeling as fit as I've ever felt.