Spain have long had a reputation as under-achievers on the big occasions, but this was a richly-merited victory for veteran coach Luis Aragones and a team that played outstanding football throughout the tournament.
Germany were outclassed, and for captain Ballack his catalogue of misery in major finals continues having lost two Champions League finals and also been suspended for the 2002 World Cup final when they lost to Brazil.
Match-winner Torres enhanced the reputation he forged at Liverpool last season, but this was an all-round effort for a side that is young enough to already be marked down among the favourites for the 2010 World Cup in South Africa.
Germany were lifted by Ballack declaring himself fit after a calf injury - but he had little impact on a first 45 minutes in which Spain were the vastly-superior side.
Andres Iniesta almost created the opening goal for Spain in the 13th minute when his driven cross took a deflection off Christoph Metzelder, but Lehmann pulled off a fine reflex save.
And they came even closer nine minutes later when Torres rose to meet Sergio Ramos's cross, but his header bounced to safety off the post.
But he was not to be denied and put Spain ahead with a trademark piece of sharpness in front of goal after 33 minutes.
Xavi's pass created uncertainty for Germany defender Philipp Lahm and Torres shrugged him off the ball to lift a superb finish beyond Lehmann.
Germany's problems threatened to worsen when Ballack needed lengthy treatment for an eye wound after a clash of heads with Marcos Senna.
David Silva then wasted a perfect opportunity to double Spain's advantage when he was set up by Iniesta, but he rushed his finish and shot wildly over the top.
Germany made a change at half-time, sending on Marcell Jansen for Lahm, but it was still Spain who dominated.
Xavi and Silva were both off target - but Germany were sticking to their task and almost grabbed an equaliser when Ballack shot just wide after Carles Puyol had conceded possession in a dangerous area.
Spain continued to look the more threatening side, but there was still the lingering prospect of Germany's refusal to accept defeat yielding an unlikely equaliser.
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Casillas lifted the Henri Delaunay trophy for Spain
Silva was fortunate to stay on the pitch when he appeared to motion to head-butt Germany's Lukas Podolski, but Italian referee Roberto Rosetti decided against taking any action.
Ramos should have put the game beyond Germany's reach after 66 minutes when he headed straight at Lehmann from point-blank range as he got on the end of Xavi's free-kick.
Iniesta then had a shot cleared off the line by Torsten Frings and another effort saved by Lehmann as Spain looked in the mood to add a second.
And Germany had a remarkable escape after 80 minutes when substitute Daniel Guiza - on for Torres - headed the ball straight into Senna's path right in front of goal, but he could not apply the final touch.
Spain were not made to pay for their generosity in front of goal and ran out worthy winners.
Spain have won the European Championship for the second time. In 1964, they also lifted the trophy after beating the Soviet Union 2-1 in the final. In 1984, they also reached the final but lost 2-0 against France.
Just as Greece four years ago, Spain have kept clean sheets in all three knock-out rounds after the group phase.
As well as winning the European Championship three times (1972, 1980, 1996), Germany have now also lost three European Championship finals (1976, 1992, 2008).
With four goals, David Villa has become top scorer at Euro 2008 without having played in the final. That is the fewest goals for a European Championship top scorer since 1992, when Dennis Bergkamp, Tomas Brolin, Henrik Larsen and Karl-Heinz Riedle all scored three goals.
At the age of 38 years and 232 days, Germany goalkeeper Jens Lehmann became the oldest player ever to appear in the European Championship final, breaking the record set by Arnold Muhren (37 years, 23 days) in 1988.
At the age of 69 years and 337 days, winning coach Luis Aragones has become the oldest coach ever to appear in the final of a European Championship. Aragones is more than four years older than Otto Rehhagel (65 years, 327 days) was four years ago when Greece beat Portugal in the Euro 2004 final.
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