Otaegui took a six-shot lead into the final round at Valderrama and was never in danger of being caught, a closing 68 giving him a tournament-record total of 19 under par.
Sweden's Joakim Lagergren also shot 68 to finish six shots behind, with Australia's Min Woo Lee another three strokes back in third.
Otaegui was one of three players added to the field for July's Genesis Scottish Open after appealing against their suspensions for playing in the inaugural LIV event in Hertfordshire.
DP World Tour members who played on the Saudi-funded rebel circuit without permission were banned from the Scottish Open and hit with individual fines of £100,000.
However, following a hearing before Sport Resolutions (UK), the suspensions imposed on Otaegui, Ian Poulter and Justin Harding were temporarily stayed, pending determination of their substantive appeals. The hearing is scheduled for February.
Otaegui played three of the first four LIV events but it is not clear if he will play any further tournaments.
Speaking about his fourth DP World Tour title, the 29-year-old told Sky Sports: "I'm very, very proud.
"I feel so happy to have my first win in Spain, in front of these crowds, on my favourite golf course in Spain. It's just unbelievable, the week went perfect.
"I just tried to play my game, tried to play as if I just teed off being square and just tried to beat the others today. I tried to stay focused and play every single hole with the same intensity and that was the main goal today.
"The whole week the crowds were absolutely amazing, especially yesterday and today. The scenery was amazing with all the narrow fairways, all the cork trees, all the spectators and all the kids - just unbelievable."
Spain's Angel Hidalgo was in tears walking on to the 18th green as fourth place sealed his DP World Tour card for next season.