The 26-year-old Forsyth, in the field this week thanks to a sponsor's invitation, moved to sixth on the current Order of Merit and earned a two-year exemption on tour.
'It feels fantastic, absolutely fantastic,' said Forsyth. 'I was pretty low at the end of last year and it is really hard for me to explain the winning feeling.'
Forsyth and Leaney finished 72 holes of regulation tied at 17-under 267, then returned to the par-4 18th for the playoff. They traded pars on the first extra hole, but Forsyth had the advantage the second time down the 18th in sudden death when he hit the fairway and Leaney drove into the right rough.
After Leaney's approach landed 50 feet from the hole, Forsyth knocked a 9-iron from 160 yards out to 15 feet. Leaney then failed to convert his long birdie attempt and Forsyth sank his putt to complete the wire-to-wire victory.
'The putt was just outside the right edge of the hole. I hit it perfectly,' Forsyth said. 'I couldn't believe it.'
Forsyth was atop the leaderboard since posting a course-record 63 in the first round and entered the final day with a two-stroke lead. Although he pushed his lead to three shots through nine holes Sunday, Forsyth bogeyed three of the first five holes on the back nine and found himself trailing for the first time with just four holes to play.
A birdie on the 15th hole gave Leaney a two-shot cushion, but Forsyth cut the lead in half with a three-foot birdie at the 16th. Then Leaney, who had missed a 12-foot birdie at 16 that would have kept him two ahead, watched Forsyth tie the lead with a birdie putt of 10 feet at the 17th.
Both players parred the 18th in regulation.
'I almost had it in the bag at one point when I was three shots ahead and felt I was nearly cruising,' Forsyth said. 'To lose it and win it again was unbelievable.'
Leaney fired a bogey-free, 4-under-par 67 in the final round -- his third 67 of the week to go with a third-round 66. Forsyth closed with 1-under 70.
Forsyth, who won the 1999 European Tour Qualifying School finals, collected five top-10s in his rookie season of 2000 to finish 46th on that year's Order of Merit. He plummeted to 116th in earnings a year later after reeling in only one top-10 finish.
For Leaney, who suffered just one bogey all week, all that was left was to mull over missed opportunities.
'I felt I had the tournament in my hands on the 16th green,' said Leaney, a three-time European Tour winner who also captured the Malaysian Amateur Championship in 1992.
'But [Forsyth] played well. He showed some guts coming down the stretch because he struggled mid round. He made a couple of mistakes but to his credit he came back with some good birdies and it was a good putt to win the title.'
It was more than a two-man race to the finish Sunday. Germany's Alex Cejka, six shots off the lead at the start of the day, birdied eight holes in the final round, including the 15th, 16th and 17th to reach 17-under.
He drove into the trees at No. 18, however, and was unable to hit the green in two. After chipping to within 10 feet, Cejka left his par-saving putt an inch short of the hole.
'I actually never thought I could be right up there,' said Cejka, who shot a 6-under 65 to finish alone in third place at 16-under 268. 'I thought the course was playing pretty easy and I was five or six shots behind. It was unlucky that final putt came up short.'
Spaniards Miguel Angel Martin and Ignacio Garrido tied for fourth at 14-under. Ian Woosnam of Wales, who celebrated his 44th birthday Saturday, rounded out the top-10 at 13-under 271 with England's John Bickerton, Argentina's Ricardo Gonzalez, Thailand's Prayad Marksaeng and Des Terblanche of South Africa.
Ireland's Padraig Harrington, who finished runner-up in the Malaysian Open the last two years, tied for 11th at 12-under.
Christian Pena of the U.S. finished eight shots back after turning in a flawless 63 made up of four birdies and two eagles.
Full-field scores from the Malaysian Open