Cullen, who won the last Players Championship event in 2020, come out on top after seeing off Masters champion Clayton in a last-leg decider, despite averaging 86.5 - his lowest on the day - at the Bolton Whites Hotel.
The Yorkshireman is currently ranked world number 16 and clinched the £10,000 top prize to see off a star-studded field to win the first ranking event of 2021.
Cullen edges past Clayton to win Players Championship 1
Cullen’s run to the final began with a last-leg win over Ryan Meikle before beating Ryan Murray, and then recording ton-plus averages in his victories over Scott Waites and Chris Dobey.
Clayton himself was seeking back-to-back titles after his heroics at the Masters in January, which sealed him the final place in the 2021 Premier League, and the Welshman started strong by taking the opening two legs in the final.
Cullen fought back and took the next three legs to make it 3-2, but neither player could really get out ahead until the Yorkshireman went within one leg of the title after hitting a crucial double 10.
Clayton, who finished with an average of over 100 across the day, won the next two legs to force a last-leg decider, hitting a 108 checkout under pressure in the 14th leg.
Four missed darts at the double gave Clayton an outside chance to snatch victory from under Cullen’s nose, but ‘The Rockstar’ hit the match-winning double to secure an 8-7 win.
MVG, Price and Wright all exit tournament early
Welshman Jon Worsley regained his Tour Card at Q School and began his year by making a terrific run through to his first PDC semi-final, beating the likes of Ryan Joyce, Damon Heta and Smith along the way.
Former world number one Michael van Gerwen was knocked out by newcomer Lewis Williams as the 19-year-old made a run to the last 16 in his debut PDC event.