His final round of 66 saw him finish the tournament on 24 under par and pick the £113,000 winner's purse.
European No. 1 Goosen finished four shots behind, level on 20 under with Australian Brad Kennedy.
Atwal finished his round in style by chipping in at the last.
Dean Robertson also chipped in at the 18th to complete a final round of 66 and take fourth place.
Earlier on Sunday morning, Atwal completed his third round in four-under-par 67 for a two-shot lead over Goosen, who is ranked No. 5 in the world.
Atwal, who was ahead by four before play was suspended yesterday because of lightning, started disastrously upon the resumption of play with a double bogey six on the ninth hole but battled back with two birdies and an eagle two at the Mines Resort & Golf Club.
Goosen, playing alongside Atwal, kept up his chase for his first title of the season by shooting four birdies in his remaining 10 holes today for a 66. Irishman Padraig Harrington, the other star attraction at the Carlsberg Malaysian Open, gave himself an outside chance with a 67 and is five off the pace.
Atwal hooked his drive on nine into the woods and ran up a six but birdied 11 and 13. He then crashed a huge drive into the short par four 293-yard 15th hole to five feet of the pin and made an easy putt for an eagle two.
But Goosen was also equally outstanding, keeping title hopes alive with two finishing birdies.
"He's praying for rain and I'm not," said Goosen. "Two birdies to finish gives me a bit more of a chance this afternoon. It'll be a good match if it doesn't get rained out. I birdied the last with a smooth wedge, 132 yards out, and spun back to a foot."
Atwal said:"I pulled my drive on nine slightly and somehow lost the ball. But I played okay after that for two birdies. I hit a great drive on 15 for the eagle which was nice. I'm still feeling good."
Sweden's Daniel Chopra joined Harrington in tied third place on 199 with Chinese upcoming star Liang Wen-chong, Brad Kennedy and Dean Robertson a further shot back on 200.
Leading third round scores: 194 - Arjun Atwal (IND) 62-65-67; 196 - Retief Goosen (RSA) 66-64-66; 199 - Daniel Chopra (SWE) 65-68-66, Padraig Harrington (IRE) 66-66-67; 200 - Dean Robertson (SCO) 66-70-64, Brad Kennedy (AUS) 68-66-66, Liang Wen-Chong (CHN) 68-66-66; 201 - Emanuelle Canonica (ITA) 67-66-68, Ted Oh (KOR) 64-67-70; 202 - Fredrik Andersson (SWE) 62-69-71, Thammanoon Srirot (THA) 63-69-70; 203 - Andrew Marshall (ENG) 71-66-66, Simon Khan (ENG) 69-67-67, Simon Dyson (ENG) 65-70-68; 204 - Patrik Sjöland (SWE) 68-66-70, Prayad Marksaeng (THA) 68-66-70; 205 - Jason Knutzon (USA) 70-68-67, Chawalit Plaphol (THA) 70-71-64, Gary Rusnak (USA) 66-69-70; 206 - Zaw Moe (MYN) 70-69-67, Gerald Rosales (PHI) 72-68-66, Paul Mcginley (IRE) 67-69-70, Thongchai Jaidee (THA) 68-68-70, Arjun Singh (IND) 67-69-70, Yeh Wei-tze (TPE) 65-69-72; 207 - Jan Are Larsen (NOR) 73-65-69, Simon Yates (SCO) 66-73-68, Mardan Mamat (SIN) 69-70-68, Chris Williams (RSA) 68-69-70, Rick Gibson (CAN) 69.