Oyarzabal slid in to poke home Marc Cucurella's cross, just when Sunday's game at Berlin's Olympiastadion seemed destined for extra time after the latest show of resilience by England at the tournament.
Substitute Cole Palmer equalised for England in the 73rd minute to cancel out Nico Williams' opener in the 47th from 17-year-old prodigy Lamine Yamal's pass.
Spain also won the title in 1964, 2008 and 2012.
Mikel Oyarzabal (21) celebrates his goal that won the Euro 2024 final for Spain against England. (AP PHOTO)
"I did my job and what I had to and was lucky enough to score the goal for the win," said Oyarzabal, who came on as a substitute for captain Alvaro Morata.
"When you are among the 26 names to be picked, that is special enough, but then to get to help the team like I did, that is the most important part."
England men's team have now lost back-to-back Euro finals and are still without a major title since winning the 1966 World Cup.
It is another agonising loss for one of the world's most underperforming national teams, this one coming in front of Prince William and Spain's King Felipe at the venue built for the 1936 Olympics.
"This time it just wasn't meant to be," the prince wrote on social media.
"We're all still so proud of you."
Yamal, Marc Cucurella and Dani Olmo were among the first to jump over the advertising hoardings to reach the Spanish fans in the stadium's east end of the stadium.
It was fitting that Yamal and Williams combined for the crucial first goal as they are the poster boys of this exciting, multicultural team that mirrors the new reality in Spain.
Lamine Yamal's assist put it on a plate for Nico Williams to STUN England in the final! 📸— Optus Sport (@OptusSport) It took them less than two minutes after the break!Watch 📲 https://t.co/OefQTvQp32#EURO2024 pic.twitter.com/FjpBuV2lCnJuly 14, 2024
Yamal's mother is from Equatorial Guinea and his father is from Morocco, while fellow winger Williams has Ghanaian parents who made the long journey to Europe looking for a better life. To make it to Spain, they had to ride on the back of a crowded truck and walk barefoot through the Sahara desert.
"Euphoria! We are so happy. We deserved this," said Williams, the player of the match.
"This is for our fans and our parents, who have supported us throughout."
Unlike his brother Inaki, who is a Ghana international, Nico chose to play for Spain and will now be regarded as a national hero there.
As, indeed, will Oyarzabal and the rest of the Spain team, who have won all seven of their matches at this tournament — an unprecedented feat — and beaten heavyweights Germany, France and England, back-to-back in the knockout stage.
"It has been a difficult ride, we have done extremely well to get here, but ultimately we are going to be judged on this game," England captain Harry Kane said.
"We wanted to do it so badly for ourselves and the fans, everyone who has believed in us."
Spain are back as a major player in senior soccer after winning both the Women's World Cup and the men's UEFA Nations League in 2023.
Since 2001, Spanish men's teams have won 23 consecutive major finals in club and international soccer.
