Tsitsipas, who turned 20 on Sunday, beat Dominic Thiem, Novak Djokovic and Alexander Zverev en route to the final but lost 6-2 7-6 (7-4).

He had a set point in the 12th game of the second set but could not convert.

Earlier, Romania's Simona Halep beat American Sloane Stephens in three sets to win the women's event in Montreal.

In a re-run of the French Open final in June, Halep eventually came out on top 7-6 (8-6) 3-6 6-2.

Tsitsipas runs nervy Nadal close

Stefanos Tsitsipas caused a scare for Rafael Nadal in the 10th game of the second set

Tsitsipas, who was the first unseeded finalist in Canada since Germany's Nicolas Kiefer in 2008, has won new fans with some brilliant shot-making and an extrovert personality.

But Nadal, 32, was in no mood to pander to the crowd in Toronto, who were firmly behind the birthday boy appearing in his first Masters Series final.

The French Open champion raced through the first set but was broken for the first time when serving for the match at 5-4 in the second set, a game that featured two double faults.

That handed the momentum to Tsitsipas, who then had a set point at 6-5 only for Nadal to benefit from a net-cord volley.

After an apparent bout of nerves, Nadal gathered himself in the tie-break to win his 80th ATP Tour title, sinking to his knees and letting out a huge roar at the end.

Halep and Stephens enjoy another epic

Simona Halep beat Stephens in the French Open final in June for her first Grand Slam triumph

In the women's final, world number one Halep took a dramatic first set in a tie-break after three breaks of service apiece, but lost the second before recovering in the decider.

Halep, who also won the Rogers Cup in 2016, emerged victorious after a marathon encounter lasting two hours and 41 minutes in sweltering conditions.

Both players were regularly doubled up, struggling for breath, amid some punishing rallies in the gruelling heat.

"I just didn't give up during the tournament, I fought until the end," said Halep.