On Friday, Didier Drogba and Bakari Kone missed the penalties for Ivory Coast while Abdel Halim Ali missed his for Egypt.
The Pharaohs had previously won the biennial competition in 1957, 1959, 1986 and 1998. Ghana and Cameroon have each captured the tournament four times.
It was also the sixth time in the Nations Cup history that the championship was decided by spot kicks.
Hassan Shehata, Egypt's coach, said they owed their victory to the total support by the 80,000-strong crowd even at a point when it looked like this was not going to be their day.
"The goal Zaki scored late in the normal time should have stood because there was nothing wrong with it and when we again lost the penalty in extra time, I was beginning to think, it was not going to be our day but thank God we were luckier during the penalty shootout," Shehata said.
"Ivory Coast are a very good team but we knew them well after we played against them thrice in recent times so we were able to know their strong and weak points."
Henri Michel, Ivory Coast's coach, rued the chances his team failed to take before the penalty shootout.
"It's a pity we were not far from winning this tournament but when you got the chances we had, you are not supposed to miss them. If Drogba had scored, it would have been over for Egypt," Michel said.
"If you look at the overall tournament, we deserved to have won it."
Michel also described the penalty awarded against his team in extra time as "robbery".
"The penalty against us was like that against Senegal, a robbery, but still they were not able to convert it," he said.
Ivory Coast midfielder Didier Zokora said they were disappointed to have lost the cup.
"Penalty shootout or not, we lost. We are really disappointed but we had a good tournament. We have qualified for the World Cup and had to show something, we proved it tonight and during the whole tournament," he said.
Ahmed Hasan, Egypt's skipper, failed to break the deadlock seven minutes into extra time when his penalty kick after a dubious foul on Mohamed Barakat by Blaise Kouassi hit the base of the post and came back into play.
The Egyptian team with the
Africa Nations Cup trophy
Amr Zaki's effort on 83 minutes after Jean-Jacque Tizie failed to hold Ahmed Hasan's shot from outside the box was also disallowed by Tunisian referee Mourad Daami for an infringement on the Ivorian goalkeeper.
Egypt, parading as many as seven players from African club champions Al Ahly in their starting line-up, went into attack from the blast of the first whistle but the Ivorian defence marshalled by Arsenal's Kolo Toure held out.
Zaki had the first shot at goal after five minutes but his right footer missed its mark then five minutes later the crafty Ahmed Hasan was brought down near the box by Kouassi but the freekick by Abdelzaher El Saqqa missed narrowly.
The Ivorians continued to soak the Egyptian pressure and even occasionally launched their own attacks, with Yaya Toure pulling the strings in midfield ably supported by defensive midfielder Didier Zokora, who worked hard and tirelessly.
Zaki's half volley inside the Ivorian box on 34 minutes missed the target as the Pharaohs continued to pile on the pressure.
However, when Ivory Coast counter attacked they looked dangerous. El Saqqa did well to stop goal-bound Drogba in the 36th minute while Kolo Toure failed to get to the end of a corner taken by Kanga Akale.
In the closing stages of the first 45 minutes, Ivory Coast began to push forward more often. Akale's shot from outside the area in stoppage time was El Hadary's first real test of the match but the Al Ahly goalkeeper emerged with flying colours as he held the ball first-time.
Two minutes after the interval, an unmarked Mohamed Aboutrika failed to direct his header for possibly one of the best chances of the game thus far.
"Ivory Coast are a very good team but we knew them well after we played against them thrice in recent times so we were able to know their strong and weak points"
The Ivorians reponded immediately but Arouna Kone's grounder failed to hit its mark.
Emad Moteab then missed with a header inside the Ivorian 18-yard box, skipper Ahmed Hasan fired a rasping shot on the hour as Egypt continued to press for the opening goal before moments later Drogba blasted wide from the edge of the Egyptian box.
Ivory Coast grew in confidence and so began to commit more men upfront. In the 75th minute Drogba blasted the ball over the bar from inside the box after some brilliant work by Kone on the right flank and then in second half stoppage time, the Chelsea striker again failed to drill home an Eboue cross.