The Young Lions faced an uphill struggle after a Sergio Gomez double put Spain in the ascendancy early on in Saturday's showpiece.
But Rhian Brewster reduced the deficit just before half-time and, after the break, Morgan Gibbs-White and Manchester City youngster Phil Foden completed the comeback to put England in the lead.
Both Brewster and Gibbs-White's goals were laid on by Steven Sessegnon, the Fulham wonderkid whose performances in west London have seen him linked with some of the Premier League's biggest clubs.
Spain appeared to throw in the towel after letting slip a commanding lead, and their woe was compounded by further strikes from Marc Guehi and Foden to round off a comprehensive 5-2 victory.
The victory was sweet revenge for the Young Lions, who suffered defeat earlier this year in the UEFA European Under-17 Championship to Saturday's rivals.
Impressively, it was also achieved without teenage superstar Jadon Sancho, who was withdrawn from the World Cup in the group stage when Borussia Dortmund called him up to their first team.
Unbowed by Sancho's absence, Steve Cooper's charges won six out of seven games in the India-based tournament, scoring 23 goals and conceding just six.
It also marks the first time that England have won a World Cup at this age group, and completes a near-clean sweep of trophies at youth level.
As well as the U-17 trophy, England also triumphed at U-20 level in this year's World Cup, while the U-19s prevailed in the European Championship in a memorable summer for everyone involved.