
Emmanuel Agyemang-Badu scored the winning penalty after Brazil's Maicon had fired over the bar when a successful spot-kick would have handed Brazil the title for a record fifth time.
In a match of few chances, Ghana, who are also African champions, defied the odds to take the trophy out of Europe and South America for the first time ever after Daniel Addo was sent off in the 37th minute for a late tackle on Alex Teixeira.
Goalkeeper Daniel Aygei kept Ghana in the game earlier in extra-time with a point-blank save from Maicon, who had been teed-up 10 yards out by Alex Teixeira's cut-back.
Douglas Costa twice went close in the additional 30 minutes, while Aygei was also called into action to save from Wellington Junior.
Meanwhile, penalties were also needed to separate Hungary and Costa Rica in the third place playoff earlier in the day, but it was the European nation who eventually triumphed after the match ended 1-1 in 90 minutes.
Despite being outplayed for the majority of the game, Costa Rica went ahead with nine minutes remaining when Marcos Urena was allowed to run at the Hungarian defence before cutting inside and firing a right-footed shot which left goalkeeper Peter Gulacsi with no chance.
However, with the match entering injury time, Hungary were awarded a penalty when Jose Mena fouled Krisztian Nemeth in the box.
Vladimir Koman made no mistake from the spot to take the match into a shoot-out.
Liverpool's Gulacsi was the hero of the hour -- keeping out efforts from Cristian Gamboa, Esteban Luna and Adam Simon while Nemeth and Roland Varga both scored to hand Hungary a 2-0 victory on penalties.
The Black Satellites and their Nigerian counterparts have both been runners-up twice, but no African team has ever gone on to win the event.
Ghana coach Sellas Tetteh firmly believes it is time for that to change.
"Africa will win the tournament and Africa will change that trend," he said the day before the game.
"An African player has scored 8 goals at the tournament (Ghana's Dominic Adiyiah) and that has never happened before."
BBC - Before the match
The Black Satellites have been boosted by the news that captain Dede Ayew will start in the final despite picking up an ankle injury in Ghana's semi-final against Hungary.
Standing in their way are a Brazil team who are the second most prolific goal scorers in the competition, behind Ghana.
"I look at a team holistically. I take any member of the team seriously. I don't like to pinpoint individuals," Tetteh said.
"They are wonderful, very skilful, technically sound, fast on the ball - so composed, such a high scoring side and especially a team to beat!"
The difference between the two sides is in the number of goals they concede.
Where Ghana have let in eight goals, Brazil's defence has been breached only three times in the whole tournament.
Brazil coach Rogerio says that is down to the organisation of his whole side.
"From the beginning, the main goal was to achieve balance between the whole team," he said.
"The defence is working that well because the team is balanced and working as well in other areas of the pitch."
Brazil have won this event four times, compared to their great rivals Argentina's six.
But Sellas Tetteh thinks this is the time for Africa to win for the first ever time, as the continent hosts three global tournaments in 10 months.
"It is a massive tournament, it's like the tournament is being staged in our country," he said when asked about the reaction back home in Ghana.
"Getting this far, people have a lot of focus and tomorrow we need to bring joy to the country and to the continent.
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