It was the Lionesses first victory in 21 attempts against the Germans and was the perfect way to sign off from a tremendous campaign in Canada.
Mark Sampson's tactical changes have been a feature of England's run throughout the tournament but his decision to switch to an unfamiliar back three almost backfired in the opening 10 minutes as Germany laid siege to the Lionesses goal.
Karen Bardsley was forced to deny Lena Petermann and Celia Sasic while Steph Houghton did brilliantly to acrobatically clear off the line after Jo Potter's miscued defensive header looked to be dropping into her own net.
England settled as the half wore on and could have taken the lead against the run of play when Houghton scuffed straight at Angerer from Lucy Bronze's delightful cutback.
Sampson's side turned the screw late on and could have won it in normal time but Jill Scott failed to get her shot away after rounding Angerer.
Germany dictated the play in extra-time but it was England who got the breakthrough before clinging on as Bianca Schmidt missed a simple header at the death.
England celebrate their first ever win over Germany
Image credit: Reuters
PRE-MATCH: Sampson appears to have switched formation for this match with England adopting a 5-2-3 system. As a result, the coach has made four changes from the heartbreaking semi-final loss to Japan, with Jo Potter, Alex Greenwood, Karen Carney and Ellen White all coming in. Meanwhile, Germany have also opted for change, with five alterations to their starting lineup. Captain Nadine Angerer plays her last game for her country between the sticks.
1' - GERMANY CHANCE! An early opportunity as Lena Petermann meets a left-wing cross with a downward header that Karen Bardsley has to push past her near post.
9' - OFF THE LINE! Houghton hooks off the line with an acrobatic clearance after Potter miscued a header beyond Bardsley from a lovely left-wing cross. It was nearly another moment of own goal heartache for a Lioness defender.
10' - GERMANY CHANCE! Sasic bears down on Bardsley... but the striker fires straight at the England keeper. Big let off for England. The tournament's top-scorer is usually deadly in those situations.
12' - ENGLAND CHANCE! First sign of England as an attacking force and they should be ahead. A corner is only half cleared, allowing Lucy Bronze to jink to the right byline. The full back cuts it back for Houghton who miskicks straight at Angerer from six yards out!
54' - GREAT SAVE! Sasic teases a cross into the area for Sara Daebritz whose hooked volley is brilliantly turned past the post by Bardsley.
66' - ENGLAND CHANCE! Houghton rises to meet Greenwood's corner but can't get a full contact on her header as it flashes wide of the far post.
69' - GERMANY CHANCE! Germany getting closer as Tabea Kemme weaves in from the left and unleashes a fizzing drive from 20 yards that arrows just wide of Bardsley's left-hand post.
73' - ENGLAND CHANCE! Big chance for Jill Scott as she arrives at the far post to meet the left-wing corner, but her header is well wide.
77' - ENGLAND CHANCE! Jill Scott is played in by Bronze but can't convert despite side-stepping Angerer. The ball is worked to the left for Carney but Scott can't convert her cross on the stretch at the far post.
100' - GERMANY CHANCE! Laudehr rises to meet a corner with a free header - but it's wide! Decent chance amidst a packed penalty area.
108' - GOAL! GERMANY 0-1 ENGLAND. Fara Williams steps up and sends Angerer the wrong way from the spot after Kemme was penalised for pulling back Sanderson in the area.
115' - SAVE! Germany work a short free kick to Mittag who drills in a low effort that Bardsley does well to gather at the second attempt.
119' - GERMANY CHANCE! Schmidt heads wide when unmarked at the far post following Popp's delicious cross from the right. It would have been easier to score - what a miss!
England's Fara Williams celebrates scoring a penalty against Germany
Image credit: AFP
England beat Germany for the first time ever.
England Women's previous 20 matches against Germany had produced two draws and 18 defeats
This was Germany coach Silvia Neid's last game in charge at a World Cup. She steps down at the end of 2015.
Steph Houghton is the only player to have played every minute of England's WWC 2015 campaign.
Laura Bassett had 100% passing accuracy in the 1st half against Germany, completing all 20 passes attempted
TALKING POINT. England can now compete with the very best. It may not have been the finale they truly wanted, but to beat Germany - ranked number one in the world - for the first time ever, and outplay world champions Japan for long spells in the semi final shows just how far England have come under Mark Sampson. The coach and his staff deserve huge praise and this squad's campaign in Canada could well prove to be a watershed moment for women's football in the UK.
England hoist head coach Mark Sampson as they celebrate their victory over Germany in the third place match
Image credit: Reuters
WOMAN OF THE MATCH
Steph Houghton (England). Led by example. Imperious at the back throughout, epitomising the character and spirit of this England team.
England: Bardsley 8, Williams 8, Houghton 9, Bassett 8, J. Scott 7, Carney 7, Bronze 8, Greenwood 8, Chapman 7, Potter 7, White 7. Subs: Aluko 7, Sanderson 7, Stoney 6.