It was England's first appearance in the final of a global tournament since their World Cup victory 51 years ago.
Everton forward Dominic Calvert-Lewin's first-half goal was enough for victory thanks to Newcastle goalkeeper Freddie Woodman's second-half penalty save.
Woodman denied Adalberto Penaranda from the spot after the Malaga forward was fouled by Kyle Walker-Peters
With 17 minutes to play, the referee pointed to the spot to signal a penalty before immediately referring to the video assistant referee.
The decision stood - there was the slightest of contacts - but Newcastle keeper Woodman's strong palm kept out Penaranda's effort.
In the first half Ronaldo Lucena hit the post with an audacious long-range free-kick that had Woodman well beaten, while Tottenham midfielder Josh Onomah saw a powerful effort strike the underside of the Venezuela bar after the break.
After the match, England forward Dominic Solanke, due to join Liverpool from Chelsea on 1 July, was awarded the Golden Ball given to the player of the tournament. Previous winners of the award include Diego Maradona, Lionel Messi, Luis Figo, Paul Pogba and Sergio Aguero.
Woodman was awarded the Golden Glove, given to best goalkeeper of the tournament.
"Thankfully Freddie saved the penalty. I was watching through my fingers from the halfway line and it was an incredible moment. It was a big, big moment that helped turn the game," said Calvert-Lewin, who joined Sir Geoff Hurst and Martin Peters as the only Englishmen to score in a World Cup final.
"To be one of only three Englishman to have scored in a World Cup final is amazing."
What is the Under-20 World Cup?
It is the biggest global tournament in youth football and has helped launch the career of a number of big names in football.
Barcelona forward Messi was in the Argentina team that won the 2005 event (then called the Fifa World Youth Championship), while Portuguese great Figo inspired his country to victory in the 1989 and 1991 competitions.
England's team in 2013 - the last time they competed in the event - featured Ross Barkley, John Stones, Harry Kane and Eric Dier. They failed to win a game and finished bottom of their group.
The last Under-20 World Cup in 2015 was won by Serbia, who beat a Brazil side containing Manchester City striker Gabriel Jesus in the final. Six of Serbia's 21-man squad have since made a full international debut, including Liverpool midfielder Marko Grujic.
Is this the country's next 'golden generation'?
England's youth teams have won the Under-17 European Championship twice - in 2010 and 2014 - and the Under-21 European Championship twice - in 1982 and 1984.
Their previous best at the Under-20 World Cup was third place in 1993. Of that squad, only four players went on to represent England at senior level - Nicky Butt, Nick Barmby, Alan Thompson and David Unsworth.
Six of the squad that triumphed in South Korea on Sunday were part of that Under-17 European success in 2014. Woodman, Jonjoe Kenny, Dominic Solanke and captain Lewis Cook all started in Sunday's final, while Dael Fry and Adam Armstrong were on the bench.
The current side have made a total of 72 Premier League appearances to date. Striker Adam Armstrong leads the way with 15 since his top-flight debut in Newcastle's 1-0 defeat by Fulham in March 2014.
England's route to the final
Group A:
Argentina 0-3 England (Calvert-Lewin, Armstrong, Solanke)
England (Cook) 1-1 Guinea (Tomori OG)
England (Dowell) 1-0 South Korea
England's Group A table
Last 16:
England (Lookman (2)) 2-1 Costa Rica
Quarter-finals:
Mexico 0-1 England (Solanke)
Semi-finals:
Italy (Orsolini) 1-3 England (Solanke (2), Lookman)
Final:
Venezuela 0-1 England (Calvert-Lewin)
Teams:
Venezuela U20: Farinez, Ronald Hernandez, Jose Hernandez, Ferraresi, Velasquez, Lucena, Herrera, Cordova, Chacon, Penaranda, Pena.
Substitutes: Quero, Makoun, Soteldo, Graterol, Hurtado, Garcia, Sosa, Mejias, Ruiz, Sanchez.
England U20: Woodman (Newcastle), Clarke-Salter (Chelsea), Tomori (Chelsea), Walker-Peters (Tottenham), Kenny (Everton), Cook (Bournemouth), Calvert-Lewin (Everton), Onomah (Tottenham), Solanke (Chelsea, joining Liverpool on 1 July), Lookman (Everton), Dowell (Everton).
Substitutes: Henderson (Manchester United), Southwood (Reading), Connolly (Everton), Maitland-Niles (Arsenal), Armstrong (Newcastle), Konsa (Charlton), Fry (Middlesbrough), Chapman (Middlesbrough), Ojo (Liverpool), Ejaria (Liverpool).
Reaction
Former England defender Danny Mills on BBC Two:
Brilliant game to watch. England at this level are starting to play with confidence, commitment and expression. They really wanted this win. This is a great building block for these young players. They are starting to produce players. St. George's Park is really starting to work. From the Under-17s right through the programme.
bbc.co.uk
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