Sadio Mane, who had missed a penalty early in normal time, scored the decisive spot-kick as Senegal triumphed 4-2 in the shootout after 120 minutes of football failed to produce a goal.
The final at the Olembe Stadium in Yaounde, Cameroon, was billed as a battle between Liverpool stars Mane of Senegal and Mohamed Salah of Egypt but it never reached those heights.
Goalkeeper Edouard Mendy saved from Mohanad Lasheen in the shootout to allow Mane the chance to seal the win and gain just reward for Senegal, who had been by far the better side in the final but spurned numerous opportunities to win the game.
Egypt had their goalkeeper Mohamed Abo Gabal to thank for getting them into the shootout as he was outstanding in keeping Senegal at bay in what was the fourth time in as many games they had played extra time in energy-sapping conditions.
There may be some poetic justice for Senegal coach Aliou Cisse, who was captain of the side in 2002 when they lost the final on penalties to Cameroon after a goalless draw, having missed his kick in the shootout.
Egypt, who had to do without suspended coach Carlos Queiroz in the dug-out, battled to get into the game and created only half-chances, with their talisman Mohamed Salah largely ineffective.
Salah was in tears at the end, having also lost the 2017 final to Cameroon and seeing his Liverpool team mate Mane seal his fate this time round.
Senegal fluffed the chance for an early lead when Mohamed Abdelmonem’s late, reckless challenge brought down left back Saliou Ciss.
Salah had a lengthy conversation with Gabal before Mane stepped up to take the spot-kick. The latter went for power straight down the middle of the goal but his effort was saved, the 10th penalty miss in the tournament.
Ismaila Sarr’s trickery down the right wing caused more early problems for Egypt and his low cross was narrowly missed by Mane at the back post on two occasions.
Egypt finally caused some alarm in the Senegal box when Salah cut inside off the right and forced a good save from Mendy.
The pattern of play continued in the second half with Senegal doing most of the attacking and both Famara Diedhiou and Mane were denied by Gabal in quick succession.
Marwan Hamdi flashed a header wide at the other end, while in the first half of extra time, Gabal again made a fine stop to deny substitute Bamba Dieng.
Additional reporting by Reuters.