The goal effectively ended the contest as the Glasgow side struggled to respond with any sustained pressure before Konstantin Zyryanov added the second in injury time, tapping the ball over the line after a neat interchange of passing.
It was just reward for a Russian side who had controlled the tempo of the match against a Rangers side that had seemed happy to sit back and allow their free-wheeling opponents plenty of territory.
The victory gave Zenit coach Dick Advocaat, who managed Rangers from 1998-2002, his first European title.
Advocaat, who reneged on an agreement to coach Australia before continuing with Zenit, has transformed Zenit since joining in 2006.
The Dutchman led Zenit to its first Russian league title last season, meaning the club will now play in the Uefa Champions League.
Zenit claimed plenty of big scalps on their way to the final eliminated Bayern Munich and Bayer Leverkusen and the future looks bright given their backing from Russian natural gas giant Gazprom.
Rangers coach Walter Smith, who had replaced Advocaat in his first spell at the club, believed his side did not make the most of their own chances.
"Over the tournament we've worked very hard to get to the final. There was not that much in it overall and we had a few chances ourselves," said Smith.
"Zenit looked the more offensive team but obviously at this stage I'm disappointed to have lost."
Arshavin had the first real opportunity of the match when his shot hit the side netting after just three minutes and it was a sign of things to come as Zenit continued to have the better of the first half chances.
Rangers goalkeeper Neil Alexander was called on to stop attacks from Zenit captain Anatoliy Tymoschuk, Radek Sirl, Zyryanov and Alexander Anyukov, while Viktor Fayzulin headed over the bar.
Rangers finally mustered its best first-half chance in the 37th when Steven Whittaker headed over the bar.
Little changed in the second half for the Scots although they nearly had a shock lead in the 54th minute when Jean-Claude Darcheville had a shot pushed away by goalkeeper Vyacheslav Malafeev and Barry Ferguson hit the post with rebound.
It seemed to give Rangers some belief as Whittaker had a shot deflected wide in the 64th.
But the Russians who then came close as from the subsequent counter-attack, Arshavin had a shot headed off the line by Sasa Papac after he had gotten around Alexander, who had run out of the box in an attempt to clear.
Now chasing the game Rangers threw on attacking midfielder Lee McCulloch at 80 minutes and then a third striker in Kris Boyd in the 87th, but the Scottish team simply couldn’t maintain possession.
While the game may not have been a classic, the fans certainly did their part to make the event a memorable one.
Rangers fans filled two-thirds of the stadium and more than 100,000 more were in downtown Manchester watching on giant screens.
More than 10,000 Zenit fans had also made the trek from St Petersburg.
Scottish police said 25,000 fans had filled Rangers' stadium in Glasgow to watch a live telecast.Rangers has already won the Scottish League Cup title, is in the May 24 final of the Scottish Cup and in contention for the league title as well.
While the Russian season is only a couple of months in, and Zenit was allowed to postpone several league games to prepare for the UEFA Cup final, Rangers is at the end of its season in Scotland.