He has been in superb form recently, winning four big events in the past four months - the four star Burghley International Horse Trials, and the three star Boekelo, Blenheim and Barbary Castle events. Nicholson was last year second at Pau aboard Mr Cruise Control.
Nicholson also won the three star at the same even 14 years ago - a revelation at the prize giving that he said made him feel rather old.
"It's very exciting to win today," he said. "To win the four star is what it is all about."
Going into the event, Nicholson - rather tongue-in-cheek - picked a Kiwi quinella, with his two horses filling the top spots.
He was chuffed to notch the win too for Nereo's owner Libby Sellar.
"She has had horses with me for a long time and this is the first time I have won a four star for her," he said. "Nereo has been superb in his performances and very consistent - he too deserves this win. I am ever so proud of him."
The victory marks the end of a "very hectic and busy" year for Nicholson, who now has "a few months of normality".
"It's been a top season and we've been rewarded with three big wins in a row."
Paget, who is ranked six in the world, took an early rail in the showjumping at Pau, but still finished inside time, to drop in just behind Nicholson.
In third place was Olympic and world champion Michael Jung of Germany and Leopin FST who took an early rail and finished with a time fault.
Powell may have brought the young Onwards and Upwards to Pau for the experience, but they made it look easy, finishing in eighth place. Powell rode the showy chestnut beautifully in the showjumping and were unlucky to take the last rail to pick up four faults.
Nicholson and the striking grey Mr Cruise Control had their fourth top 10 finish from six four star starts with their efforts. The easily completed the showjumping phase inside the time allowed, but took a rail mid course to add four faults to their tally and finish on 49.7 for seventh place.
Alice Montgomery and Gordon notched their first-ever four star completion. The combination went clear in the showjumping, but picked up five time faults to finish on 90.5 and in 21st place.
"Gordon was super today," said a very happy Montgomery, who now plans to give her horse a well-deserved holiday.
The event attracted a superb line-up of 62 combinations from 17 nations, with just 32 starting the final phase.
Results (final) -
CCI4*: Andrew Nicholson (NZL) Nereo 39.3 1, Jonathan Paget (NZL) Clifton Promise 40.7 2, Michael Jung (GER) Leopin FST 43.3 3, William Fox-Pitt (GBR) Bay My Hero 45.7 4, William Fox-Pitt Chilli Morning 45.7 5, Aster Nicolas (FRA) Jhakti Du Janlie 47.5 6, Andrew Nicholson (NZL) Mr Cruise Control 49..7, Caroline Powell (NZL) Onwards and Upwards 57.2 8, Richard Jones (GBR) Highland Ford 63.6 9, Gemma Tattersall (GBR) Stormhill Kossack 68.5 10, Alice Montgomery (NZL) Gordon 95.5 21.
CIC2*: Christopher Burton (AUS) Graf Liberty 40.7 penalties 1, Michael Jung Fischerrocana FST 41 2, Mark Todd (NZL) Regent Lad 45.2 3, Karin Donckers (BEL) Fletcha Van't Verahof 47.4 4, Caroline Powell (NZL) The Earl of Belvedere 47.7 5, Christian Weerts (FRA) Kondeedn De Scye 48.6 6, Ruth Edge (GBR) Mister MacCondy 50.4 7, Andrew Nicholson (NZL) Teseo 53.3 8, Julian Stiller (USA) Enjoy Me 53.8 9, Arnaud Boiteau (FRA) Parador Du Foussal 54.7 10.