Tries from Freddie Steward and Marcus Smith powered England to a come-from-behind 21-17 victory in the deciding third Test on Saturday to seal a bruising series at a sold-out Sydney Cricket Ground.
Eddie Jones's men slumped 10-3 behind, but bounced back with 18 unanswered points to take control and hold off a frantic late charge from the Wallabies.
England's defence, marked by fierce tackling, thwarted the shorthanded Wallabies to claim the newly-minted Ella-Mobbs Cup with a 2-1 series victory.
Jones's team became only the second England side to win a series in Australia after a historic whitewash in 2016.
The triumph is a much-needed tonic for Jones, who has been under increasing pressure ahead of next year's World Cup in France after an indifferent start to the year for England.
But it was a bitter result for the Wallabies, who have been trying to usher a new era after a period in the wilderness.
Dave Rennie's men were hit hard through this brutal series by injury and suspension, which tested their depth and resolve as they fell agonisingly short.
Prior to their tense series opening win in Perth, Australia had lost eight straight games to England since the 2015 World Cup and were desperate to wrap up a series against their old rival.
After a dire first-half proved costly in game two in Brisbane, the Wallabies lived up to their vow of starting aggressively only for Noah Lolesio to botch a penalty in the opening minutes.
The pumped-up Wallabies dominated territory but butchered opportunities and failed to capitalise on their early dominance.
England made them pay and drew first blood in the 18th minute when former skipper Owen Farrell nailed a penalty.
But Australia hit back superbly with a long range try set up by a brilliant pass from Marika Koroibete and finished off by a dashing Nic White, who crossed over in the right corner.
England, however, remained unperturbed and were rewarded on the cusp of half-time for their bold decision to go for touch from a penalty instead of taking the points when Steward dived over in the corner to give the visitors a narrow 11-10 lead.
England's momentum continued after the break and they pulled clear when Smith pounced on a loose ball from the lineout and ran 60 metres to score under the posts.
A desperate Australia reverted to attack and it paid dividends in the 66th minute when hooker Folau Fainga'a barged over for a try to breathe life into the contest.
But England's indefatigable defence held firm against Australia's late rally to defy the rowdy SCG crowd in what was likely to be the historic venue's final rugby international.