Australia pulled off another outstanding run chase to beat their trans-Tasman rivals at Dubai International Stadium, where Kane Williamson's outstanding 85 off 48 balls proved to be in vain.
The Black Caps posted 172-4 thanks to Williamson's masterclass, the skipper's knock equalling Marlon Samuels' record score in a T20 World Cup final for West Indies in their victory over England five years ago.
Australia cruised to their target with seven balls to spare, player of the tournament David Warner (53 from 38 balls) and Marsh starring with the bat.
Marsh finished unbeaten 77 not out off 50 balls, breaking a record Williamson had set earlier by making the fastest fifty in a T20 World Cup final from just 31 deliveries.
The all-rounder has never really fulfilled his potential at international level due to injuries, but showed what he is capable on the big stage and revelled in a historic evening for Australia.
Man of the match Marsh said during the post-match interview: "I don't really have words, what an amazing six weeks with this group. Love them to death. World champs."
Marsh hit the first ball he faced for six, putting Mitchell Santner into the stand, and cleared the rope another three times, as well as hitting a further six boundaries.
He relished the opportunity to bat at number three and was determined to grasp his chance.
The 30-year-old said: "The coaching staff came up to me in the West Indies and said you're going to bat three for this tournament, and I jumped at it. I have the staff to thank for backing me and getting me up the top there.
"I just love playing for this team. I just wanted to get out there and have a presence, which big Marcus Stoinis always talks to me about. I can't believe it. It's unbelievable."
Questions had been asked about Warner's place in the team coming into the tournament, but the opener finished as the second-highest run-scorer with 289 behind Pakistan captain Babar Azam (303).
Warner said: "I always felt really well. I didn't get much time in the middle in the practice matches but it was about going back to basics and getting on some hard synthetic wickets and get hitting balls. I managed to do that and then I scored runs.
"This is definitely up there with 2015. Being part of the 2010 [World T20 final) defeat to England hurt, but the women winning made us a feel a bit of that. These guys are a great bunch of guys. We've got a great support staff and support around the world."
The Australians will look to defend their T20 title in the tournament that runs from October 16 to November 13 in Australia and New Zealand.
Globetrotting T20 star David is the major surprise in the squad and the only change from last year's group that lifted the world title in UAE, replacing spinner Mitchell Swepson.
Australia's squad includes the usual suspects such as David Warner, Glenn Maxwell, Steve Smith and vice-captain Pat Cummins. Mitch Marsh is selected despite a recent ankle concern.
Skipper Aaron Finch, 35, had been under some pressure to hold his spot but is named, with the group also to travel to face India in three T20 Internationals in September in preparation. Warner will be rested for the India tour with Cameron Green taking his place.
National Selection Panel chair of selectors George Bailey said: "This is a similar squad to that which became the first Australian’s men’s team to win a T20 World Cup who are now very excited about playing the tournament at home.
"Mitchell Swepson was unlucky to miss out based on conditions in the UAE at the last World Cup where we planned for tired, spinning wickets compared to what we would expect are good batting conditions along with the larger grounds in Australia.
"Tim continues to establish himself with some quality performances in leagues around the world, earning a place in the squad. He is a highly gifted, natural ball striker who will add extra batting depth to the group which has had a lot of success in T20 cricket.
"We expect him to play a similar role to that he has been playing in the past few years."
David, who previously represented the country of his birth Singapore in 14 T20Is in 2019 and 2020, has impressed in global T20 leagues including with the Mumbai Indians in the IPL, the Southern Brave in The Hundred and the Hobart Hurricanes in the Big Bash League.
The 26-year-old has amassed 1,874 runs at a strike rate of 168.4 in 86 T20 games over the past two years in a late-overs batting role, with part-time off-breaks.
David's strike rate of 216.28 in eight matches with the Mumbai Indians earlier this year was the highest by any player to have faced at least 50 balls in a single IPL season.
Josh Philippe, Ben McDermott, Sean Abbott, Jhye Richardson and Swepson were among the unlucky players to miss out on selection.
Australia faces India in the first of their three T20Is on September 20 in Mohali, with their first World Cup match against New Zealand in Sydney on October 22.
Australia's T20 World Cup squad: Ashton Agar, Pat Cummins (vc), Tim David, Aaron Finch (c), Josh Hazlewood, Josh Inglis, Mitchell Marsh, Glenn Maxwell, Kane Richardson, Steve Smith, Mitchell Starc, Marcus Stoinis, Matthew Wade, David Warner*, Adam Zampa.
* Will be replaced by Cameron Green for three T20Is, September 20-26, in India
Australia will also be without coach Justin Langer for the five-match series, with the 51-year-old being given a break after a busy period.
Assistant Andrew McDonald will act as head coach for the series, which runs from February 11 to 20.
While Australia will be without two of their T20 World Cup stars in Warner and Marsh, Josh Hazlewood is back involved after returning from injury.
Ben McDermott, who impressed during the Big Bash League campaign, is also included in the 16-man squad that was named on Tuesday.
"I don't think that I wasn't ready to play for Australia before, but I certainly feel ready now," said McDermott, who has already made 19 appearances for his country.
"I feel like I'm at the top of my game. I've developed a lot of learnings through some experiences.
"They haven't all been good ones, I won't shy away from that, but I've definitely learned from those experiences and hopefully I come back well."
The other members of Australia's successful World Cup campaign to miss out on selection are Mitchell Swepson, Daniel Sams, Dan Christian and Nathan Ellis
National selectors chair George Bailey said: "This squad will begin preparation for the ICC T20 World Cup defence at home later this year and includes several players who have an early chance to impress in these five matches against a quality opposition."
Australia T20 squad: Aaron Finch (c), Ashton Agar, Pat Cummins, Josh Hazlewood, Travis Head, Moises Henriques, Josh Inglis, Ben McDermott, Glenn Maxwell, Jhye Richardson, Kane Richardson, Steve Smith, Mitchell Starc, Marcus Stoinis, Matthew Wade, Adam Zampa
Warner suffered an injury to his neck during the second T20I match against England on Wednesday, which forced him to miss the series finale on Friday – a match that was abandoned due to rain.
Finch is unsure whether his fellow opener will be fit enough to face India, but has no concerns over Warner's availability for the clash against New Zealand on October 22.
"I think he would definitely be right for New Zealand," Finch said. "I'm not sure about the warm-up game against India.
"I think he was okay the day after he hit his head and then the following day, his neck got really sore and stiff.
"We'll wait and see what it's like. If he's fit he'll play. If he's still a little bit sore, we'd err on the side of caution.
"I think when you've got experienced players who know what they need to do to be ready for a tournament, you're not too concerned whether they play that game or not."
Finch also confirmed Australia are taking it easy with all-rounders Marcus Stoinis and Mitchell Marsh in a bid to avoid injury flare-ups.
Stoinis missed both T20I series against India and the West Indies with a side injury he sustained in September, while Marsh has not bowled in a match since injuring an ankle in the ODI series against Zimbabwe in August.
"Stoinis, the reason he wasn't available to bowl yesterday was just prior injury history," Finch explained.
"Every time that he's tried to come back and ball back-to-back games coming off the same injury he has struggled and got a niggle on the back of it. So, we went with the conservative route there."
"Mitch has been building up his bowling at the moment. He just hasn't been at the intensity to go into a game that's required especially so close to a World Cup."
In the end, the West Indies triumphed in an 18-run win in St Lucia on Friday but at one point seemed headed for a certain defeat. On the back of a century from Mitchell Marsh, the Australians had put 70 for the loss of three wickets on the board, at the end of the power play.
However, Walsh Jr combined with the man of the match Obed McCoy and the spinners decimated the Australia line-up as the visitors lost their last six wickets for 19 runs. Walsh Jr accounted for Marsh in his haul of 3 for 23, while McCoy ended with 4 for 26.
“We just kept believing and we just kept thinking we were always in the game. We were picking up wickets all the time so with us picking up wickets we just felt we were always in the game,” Walsh said following the match.
“When I came on to bowl, the way that I bowled I just had the feeling that these guys were going to have trouble playing me and getting the ball off the square and hitting boundaries,” he added.
The spinner was returning to the squad for the first time since November of last year.
