Spain's Nations League win follows their World Cup triumph in 2010 and three European Championship titlesCroatia missed out on their first international trophy after losing on penalties to Spain in the Nations League final.
Dani Carvajal calmly chipped home the winning effort to seal a 5-4 victory on spot-kicks after Unai Simon had saved from Bruno Petkovic.
The contest in Rotterdam had finished goalless after extra time.
It is Spain's first international trophy for 11 years, since their victory at Euro 2012.
Victory also means Spain become the second nation to win the World Cup, European Championship and Nations League following France, who beat the Spanish in the 2021 Nations League final.
They could have won the shootout earlier after Simon saved from Lovro Majer, only for Aymeric Laporte to slam Spain's fifth penalty off the crossbar.
It did not matter, however, as Simon kept out the subsequent effort from Petkovic, allowing Carvajal to be the hero.
Dani Carvajal chipped in the winning penalty to secure Spain's shoot-out win after disappointment at the World CupHeartbreak for Modric
Having reached the final of the 2018 World Cup and finished third at Qatar 2022, Croatia were desperate to go one step further and clinch a maiden title.
They were certainly well backed in Rotterdam, with a sea of Croatian flags and red and white shirts in the De Kuip stands.
It was also a chance for Luka Modric, earning his 166th international cap, to top off a stellar career with a first piece of international silverware.
The pressure of this may have contributed to a slow start by Croatia, with Gavi almost capitalising as Spain pressed high only to drag a shot wide from a good position.
Croatia soon hit their stride, however, their direct style causing issues for Spain with their high defensive line and only a fine tackle by Laporte denied Andrej Kramaric when a ball over the top seemed to have set the striker free.
As the game wore on towards extra time, Croatia continued to apply more pressure. However it was Spain who had the better chances with Marco Asensio coming close with a header, Fabian Ruiz chipping narrowly over and Ansu Fati denied on the line by Ivan Perisic in the second half.
Extra time brought no winner so penalties decided the outcome, bringing glory to Spain and despair to Croatia.
It remains to be seen whether this was Modric's final chance to deliver a trophy for his country, with the 37-year-old former Ballon d'Or winner set to make an announcement on his international future this week.
Defeat may yet see him stay on to play in next summer's European Championship in Germany.
Line-ups
Croatia
Formation 4-3-3
1Livakovic
22Juranovic5Erlic6Sutalo14Perisic
10Modric11Brozovic8Kovacic
15Pasalic9Kramaric16Ivanusec
1Livakovic22JuranovicSubstituted forStanisicat 112'minutes5Erlic6Sutalo14Perisic10Modric11Brozovic8Kovacic15PasalicSubstituted forPetkovicat 61'minutesBooked at 90mins9KramaricSubstituted forMajerat 90+1'minutes16IvanusecSubstituted forVlasicat 78'minutesSubstitutes
2Stanisic3Barisic7Majer12Labrovic13Vlasic17Petkovic18Musa19Sosa20Beljo21Vida23IvusicSpain
Formation 4-2-3-1
23Simón
22Navas3Le Normand14Laporte18Alba
16Rodri8Ruiz
10Asensio9Gavi15Pino
7Morata
23Simón22NavasSubstituted forCarvajal Ramosat 97'minutes3Le NormandSubstituted forNachoat 78'minutesBooked at 96mins14Laporte18Alba16RodriBooked at 97mins8RuizSubstituted forMerinoat 78'minutes10Asensio9GaviBooked at 81minsSubstituted forOlmo Carvajalat 87'minutes15PinoSubstituted forAnsu Fatiat 66'minutes7MorataSubstituted forJoseluat 66'minutesSubstitutes
1Arrizabalaga2Carvajal Ramos4Nacho5Zubimendi6Merino11Canales12Ansu Fati13Raya17García Torres19Rodrigo20Joselu21Olmo CarvajalLive Text
Match ends, Croatia 0(4), Spain 0(5).
Penalty Shootout ends, Croatia 0(4), Spain 0(5).
Goal! Croatia 0(4), Spain 0(5). Dani Carvajal (Spain) converts the penalty with a right footed shot to the high centre of the goal.
Penalty saved! Bruno Petkovic (Croatia) fails to capitalise on this great opportunity, right footed shot saved in the bottom left corner.
Penalty missed! Still Croatia 0(4), Spain 0(4). Aymeric Laporte (Spain) hits the bar with a left footed shot.
Goal! Croatia 0(4), Spain 0(4). Ivan Perisic (Croatia) converts the penalty with a right footed shot to the bottom right corner.
Goal! Croatia 0(3), Spain 0(4). Marco Asensio (Spain) converts the penalty with a left footed shot to the top right corner.
Penalty saved! Lovro Majer (Croatia) fails to capitalise on this great opportunity, left footed shot saved in the centre of the goal.
Goal! Croatia 0(3), Spain 0(3). Mikel Merino (Spain) converts the penalty with a left footed shot to the bottom right corner.
Goal! Croatia 0(3), Spain 0(2). Luka Modric (Croatia) converts the penalty with a right footed shot to the high centre of the goal.
Goal! Croatia 0(2), Spain 0(2). Rodri (Spain) converts the penalty with a right footed shot to the bottom left corner.
Goal! Croatia 0(2), Spain 0(1). Marcelo Brozovic (Croatia) converts the penalty with a right footed shot to the bottom left corner.
Goal! Croatia 0(1), Spain 0(1). Joselu (Spain) converts the penalty with a right footed shot to the top left corner.
Goal! Croatia 0(1), Spain 0. Nikola Vlasic (Croatia) converts the penalty with a right footed shot to the top right corner.
Penalty Shootout begins Croatia 0, Spain 0.
Second Half Extra Time ends, Croatia 0, Spain 0.
Corner, Croatia. Conceded by Joselu.
Corner, Croatia. Conceded by Nacho.
Attempt missed. Mateo Kovacic (Croatia) right footed shot from outside the box misses to the left. Assisted by Nikola Vlasic.
Foul by Jordi Alba (Spain).
