Earlier, he had done his country proud by capturing the crown in Sri Lanka in 2006.
The title clash saw the two players fighting aggressively until three-all when the Pakistani gave up losing the next four frames in a row.
Kachaiwong won the battle 17-49, 78-15, 65-73, 94-40, 66-6, 43-64, 85-30, 81-1, 123-8, 120-1.
The Thai cracked three efficient breaks of 78, 80 and 61 in the second, ninth and tenth frames. Sajjad chalked up a break of 51 in the sixth frame.
Sajjad became the second Pakistani to have played the final since the inception of the Asian Snooker Championship in 1984 the first being veteran Mohammad Yousuf who captured the crown in 1998. Sajjad, however, earned the distinction of scoring highest break (134) of the event.
Earlier, Kachaiwong's compatriot Thanawat Thirapongpaiboon edged past two-time former Asian champion, Yasin Merchant of India, 3-1 to seize third position.
After conceding the opener 0-88, the Thai was home 64-59, 106-0, 77-36.
Results
Final Issara Kachaiwong (Thailand) bt Mohammad Sajjad (Pakistan) 7-3 (17-49, 78-15, 65-73, 94-40, 66-6, 43-64, 85-30, 81-1, 123-8, 120-1).
Playoff for third position Thanawat Thirapongpaiboon (Thailand) bt Yasin Merchant (India) 3-1 (0-88, 64-59, 106-0, 77-36).
