Curtis Jones's freak first-half goal proved the difference, but goalkeeper James Trafford made himself a national hero with a dramatic last-minute penalty save from Abel Ruiz, as the Young Lions won their first Euros title since coincidentally beating Spain in the 1984 showpiece - doing so without conceding a single goal in the entire tournament.
Not since 2011 had England and Spain squared off at Under-21 level, but there was no love lost between the two sides in an opening 45 replete with fouls, bookings and late drama.
Lee Carsley's side exploded out of the blocks, but Arnau Tenas only had the one early save to make from Anthony Gordon in the sixth minute, before the Young Lions were nearly the architects of their own downfall on several occasions.
By frequently giving the ball away in dangerous areas, England presented Spain with a plethora of chances to break the deadlock - one of which saw Alex Baena curl just wide with 13 minutes on the clock.
Spain's press was suffocating a relatively passive England, but the muted Adjarabet Arena crowd were evidently yearning for just a flash of action to counteract the wealth of stoppages inside the first half.
Both sets of fans got their wish just before the half-time whistle blew, as from a 44th-minute free kick, a header from Levi Colwill into the ground bounced onto the crossbar, before Spain managed to clear their lines.
However, in the fourth minute of injury time, another set-piece would produce the first goal of the game in unorthodox circumstances, as Cole Palmer's free kick from distance took a significant deflection off a crouching Jones and nestled into the bottom corner.
A large-scale fracas erupted between the two benches amid England's unrestrained celebrations, after which England coach Ashley Cole and his opposite Spanish number were sent off for their troubles, but the Young Lions clung onto their slender lead as the half-time whistle blew.
Carsley's side came under the cosh early in the second half, though, and Spain briefly thought that they had restored parity through a Ruiz header, but the offside flag saved England's bacon.
After England weathered that storm, Jones drove into the penalty area in search of his second in the 65th minute, but Tenas stuck out a strong left hand to save, before Ruiz directed a deft header wide of the post from Sergio Gomez's floated cross three minutes later.
Spain continued to huff and puff, but the impenetrable England defence held firm, and La Rojita were soon indebted to a stunning save from a scrambling Tenas in the 89th minute, as the Spain goalkeeper denied Harvey Elliott before also keeping out Noni Madueke with his legs as the Chelsea man tried to slot home the rebound from a tight angle.
Spain were granted six minutes of additional time to try to find a way through, and just when England were gearing up for their trophy celebrations, Colwill - who had barely put a foot wrong all evening - kicked Ruiz on the foot inside the area while attempting to clear the ball.
Following a check of the monitor, the referee awarded Spain a last-gasp penalty, but Trafford etched his name into England folklore as he denied Ruiz from 12 yards before keeping out the rebound and witnessing a third Spain attempt fly over the bar.
In the aftermath, the new Burnley man was immediately mobbed by his teammates, while Antonio Blanco and Morgan Gibbs-White both saw red as tempers flared in the dugouts once more, but as the clock ticked past 100 minutes, England were finally allowed to celebrate the most incredible of Euros triumphs.
The Young Lions have now been crowned European champions on three occasions - following in the footsteps of the 1982 and 1984 teams - while Spain finished as runners-up for the second time in four tournaments, also collecting the silver medal in 1984, 1996 and 2017.