Barcelona star Ferran Torres came off the bench to smash home the winner deep into extra time, just as the contest looked to be ticking towards a penalty shootout.
Victory against the 2022 champions means Luis de la Fuente's team are now the reigning European and World Cup kingpins and just one title behind their iconic treble from 2008-2012.
De la Fuente's plan was built on young stars stepping up on the big occasion and Spain's starting line up in the final included two teenagers in Pau Cubarsi and Lamine Yamal.
There is a core of players in place ahead of qualification for UEFA Euro 2028 and De la Fuente hailed the resilience of his team against the might of Argentina.
"I feel very proud of this generation of footballers who have grown up with our ideals, faithful to those ideals.
"They have been a perfect example of a group and as a family, great footballers with exceptional talent... I feel proud.
"I think the game should have been decided much earlier, Dibu's (Emi Martinez) saves prevented us from winning sooner. We should have taken the lead earlier, but it's a World Cup final, and you have to suffer even against ten men, we were prepared for anything."
De la Fuente's team are next in action as part of September's UEFA Nations League campaign with a double header up against England and Croatia.