The world number one, who won all eight of his rubbers he played this week, handed his country their first Davis Cup title since 2011 in style.
Nadal has now won his last 29 Davis Cup singles matches, and he never looked like losing to Shapovalov after Roberto Bautista Agut overcame Felix Auger-Aliassime in the opening rubber.
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The 33-year-old stamped his authority on proceedings as early as the sixth game of the opening set as he ruthlessly broke Shapovalov's serve as a result of relentless pressure.
It took just 35 dominant minutes for the Mallorcan to take the first set and it immediately felt as though he had his opponent's number as the home fans went wild.
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Shapovalov stepped up his level considerably in the second set to give his illustrious opponent a much tougher resistance, and the result was a stalemate to serve.
A stunning passing shot from Nadal almost forced a break of serve at 4-4, but the 20-year-old responded with impressive composure to hold, and the set moved inexorably to the breaker.
Shapovalov threw everything he could at his opponent in an incredibly tense breaker, including fending off two match points when 6-4 down, but Nadal came through 8-6 to close out yet another famous triumph.
Nadal has won 19 Grand Slam singles titles, and he also now has a staggering five Davis Cup crowns to his name in 2004, 2008, 2009, 2011 and 2019.
"Amazing week, a lot of things we went through - the father of Roberto passed away... a lot of things happened," he told Eurosport after the match.
"I could not be happier. It has been an unforgettable moment in this amazing stadium, we can't thank the crowd enough. Our team spirit prevails."
It has been an outrageously strong season for Nadal, who scooped up two more Grand Slams at Roland Garros and the US Open; reached the final of the Australian Open and last four at Wimbledon.
Clinching the season-ending world number one ranking appeared a fitting way for him to conclude his year, only for him to now add Davis Cup glory on top.