A Dujon Sterling own goal brought Portugal level although Lukas Nmecha grabbed what proved to be the winner in the 68th minute.
There were nervy moments at the end of the game with England reduced to 10 men after Fulham midfielder Adetayo Edun was given his marching orders.
But Keith Downing's side held on to claim the win and lift the European Championship trophy for the first time in their history.
The result caps a marvellous summer for the nation's youth teams, with the Under-20 side having previously won the World Cup by beating Venezuela in the final back in June.
That was preceded by the Young Lions' success at the Toulon Tournament, with the Under-18's beating Ivory Coast in the final on penalties.