Smith - whose first Premier title came in Dortmund four years ago - doubled his trophy tally at the Westfallenhalle with a stellar run of performances, including victory over Schindler in the showpiece.
After four holds of throw, Smith rattled off six legs straight to take a commanding 8-2 lead to move three legs away from a dominant win.
However, Schindler battled back, winning four legs straight including checkouts of 116 and 127 to reduce the deficit to 9-6 and threaten a remarkable fightback.
Nevertheless, Smith calmed matters with a hold of throw to go one leg away, before eventually sealing victory with his fifth match dart to secure the title in Dortmund.
“To have this trophy in my hands and to win another major, I’m absolutely over the moon,” said Smith, who also claimed the World Series of Darts Finals crown in September last month.
“I was a little bit nervous going into that last break. Martin wouldn’t let up would he? Full credit to him.
“I’ve played Martin many times on the circuit and he’s fantastic. He’s a really lovely guy as well, but he’s so hard to play. He’s a fighter.
“I just play the game in front of me. Every game I play is a final, I’m buzzing to have won another major, and that’s for my Mum and Dad!”
Top seed Smith kicked off his title bid with a hard-fought 6-4 win over Karel Sedlacek on Thursday, before fending off Damon Heta with a 10-7 triumph on Saturday.
The 37-year-old then produced a cracking 107 average during his 10-6 victory over Luke Woodhouse, defying an average of over 103 and 60% checkout success rate from his opponent.
The World Series Finals champion saw off Gerwyn Price 11-7 in the last four, recovering from 4-1 down to reach a third TV final of his career - where he maintained his 100% success rate in Premier finals to see off home hero Schindler.
Smith joins Michael van Gerwen, Phil Taylor, Rob Cross and Peter Wright as a multiple winner of the European Championship, scooping the £150,000 top prize and third Premier title while jumping up to world number six in the process.
SATURDAY OCTOBER 24TH (13.00 / 19.00)
ROUND TWO (19)
Gerwyn Price 10-4 Cameron Menzies
Stephen Bunting 10-3 Kim Huybrechts
Ross Smith 10-7 Damon Heta
Luke Woodhouse 10-6 Gian van Veen
Krzysztof Ratajski 10-8 Kevin Doets
Martin Schindler 10-4 Jermaine Wattimena
Nathan Aspinall 5-10 Luke Littler
Jonny Clayton 10-8 Josh Rock
SUNDAY OCTOBER 25TH (13.00 / 19.00)
QUARTERS (19)
Ross Smith 10-6 Luke Woodhouse
Gerwyn Price 10-3 Stephen Bunting
Martin Schindler 10-1 Jonny Clayton
Krzysztof Ratajski 10-6 Luke Littler
Evening Session (1900-2300 CET)
SEMIS (21)
Ross Smith 11-7 Gerwyn Price
Martin Schindler 11-6 Krzysztof Ratajski
FINAL (21)
Ross Smith 11-8 Martin Schindler