Goals from Nuno Mendes and Cristiano Ronaldo both cancelled out Spain leads, with their finishes coming from Martin Zubimendi and Mikel Oyarzabal.
That forced the game to extra-time and eventually penalties, where former Wolves loanee Vitinha, who started the final, was one of four Portuguese players to convert their first four spot-kicks.
Ruben Neves lifts the Nations League trophy (Photo by TOBIAS SCHWARZ/AFP via Getty Images)
Ruben Neves lifts the Nations League trophy (Photo by TOBIAS SCHWARZ/AFP via Getty Images)
Diogo Costa's save from Alvaro Morata's penalty handed Portugal a chance to win it and former Wolves captain Ruben Neves, who came on at half-time when Portugal were 2-1 down, calmly slotted home to give Portugal their second Nations League triumph.
That meant Portugal were the first nation to win the competition twice, denying Spain who were aiming for the same record.
Nelson Semedo celebrates after winning the UEFA Nations League (Photo by ALEXANDRA BEIER/AFP via Getty Images)
Nelson Semedo celebrates after winning the UEFA Nations League (Photo by ALEXANDRA BEIER/AFP via Getty Images)
Wolves were heavily represented in Roberto Martinez's squad and former winger Pedro Neto also started the game, before coming off in extra-time for former Wolves attacker Diogo Jota.
Wolves captain Nelson Semedo, who is currently out of contract but has a new four-year deal on the table, was also introduced at half-time alongside Neves and played the rest of the fixture.
Pedro Neto and Vitinha celebrate winning the UEFA Nations League (Photo by TOBIAS SCHWARZ/AFP via Getty Images)
Pedro Neto and Vitinha celebrate winning the UEFA Nations League (Photo by TOBIAS SCHWARZ/AFP via Getty Images)
Former loanee Francisco Trincao was an unused substitute on the bench, alongside Wolves goalkeeper Jose Sa.
Not playing did not stop Sa from enjoying the celebrations, however, as he was pictured next to Ronaldo as the captain lifted the trophy.
Jose Sa (left) lifts the Nations League trophy (Photo by TOBIAS SCHWARZ/AFP via Getty Images)
Jose Sa (left) lifts the Nations League trophy (Photo by TOBIAS SCHWARZ/AFP via Getty Images)