Spain's Andres Iniesta has taken his team to their first World Cup final victory, scoring the game's only goal in the 116th minute.
His team-mates erupted into chants and were jumping in triumph at television cameras and the crowd in Johannesburg's Soccer City stadium.
Dutch players sat on the pitch with heads bowed in tears and the packed Museum Square in Amsterdam fell momentarily silent in disappointment.
The trophy was lifted by an overwhelmed Iker Casillas - the team's goalie and captain - after the bitterly-fought match which resulted in Spain's fourth consecutive 1-0 score line.
Despite some nail-biting moments where both sides came within inches of scoring, neither team managed to get the ball past the posts before the second half of extra time.
Tensions were high on the pitch in South Africa with English referee Howard Webb dishing out a whopping 12 yellow cards, mostly to the Dutch.
The most eye-watering moment was when Dutch Nigel de Jong took to the air with his foot aimed directly at the chest of Spain's Xabi Alonso, who took the full force and smashed to the ground barely able to breath.
De Jong was given a yellow card, sparking fury among many who say he should have been sent off. Yet Alonso managed to remain on the field.
Nerves among the players were tangible in what was an extremely physical match.
Gripped by the action, fans around the globe were transfixed by the game, with huge parties in Amsterdam and Madrid.
Supporters were going crazy all day and evening, chanting and singing in the hope that their team would bring home the trophy.
Earlier, officials in Amsterdam warned that the main square was so full that those who had not yet arrived should stay away.
The 100,000 who made it in to the Museumplein, however, were showered by orange flowers falling from helicopters hovering above.
A spokesman for the city's authorities said: "We urge people not to come to Amsterdam or the Museumplein (Museum Square) any more, for public safety reasons but also simply because they won't be able to see anything of the match."
Sky News producer Sunita Jaswal had been in the square all day.
Ahead of the match she said the atmosphere was triumphant, adding: "This is one giant party. The crowd is buzzing with excitement and the square is a sea of orange."
Jaswal went on: "Vuvuzelas, whistles and horns galore!"
Sky News correspondent Alex Rossi, who was also in Amsterdam, said: "There's a great deal of expectation here. The beer is flowing and they are calling it 'Orange Fever'."
Meanwhile, in their competitor's capital city, Sky News reporter Jeremy Langdon said: "We think around a quarter of a million people are on the streets of the Spanish capital tonight - it's like organised chaos.
"It's 40C in the sunshine in Madrid. I kid you not, it is boiling hot."
And before Spain's victory, he added: "There will be a homecoming parade in the city tomorrow so win or lose, Spain will be on the streets of Madrid... everyone is massively excited."
As part of a spectacular pre-match ceremony, former South Africa leader Nelson Mandela appeared in the stadium. Sky News producer Dan Williams saw him and said "the crowd went crazy" for him.