The Boks flew out of the blocks, spurred on by a partisan 14,000 crowd, and were immediately rewarded when Dusty Noble found a gap, sending the ball wide for a galloping Schalk van der Merwe to score in the corner.
New Zealand hit back almost immediately when Alfred Pelenise handed off Ryno Benjamin to level the score but Nigel Hunt was unable to put them into the lead with the conversion.
Hunt eventually broke the deadlock on the half-time whistle by beating Van der Merwe with pace to give the All Blacks a 10-5 lead at the break.
Zar Lawrence extended that further within a minute of the restarts as New Zealand pulled 17-5 ahead after some poor tackling by the Springboks.
The Boks brought on leading try scorer Phillip Burger, who scored almost immediately as he combined with Stefan Basson on a blindside move.
The Boks own handling mistakes were to cost them dearly again when they conceded a scrum in their own 22-metre area and Pelenise ran around to score.
Van der Merwe managed to break two tackles to bring the Boks back to seven behind with less than a minute to go but New Zealand held out to win the tournament to the disappointment of the crowd.
Earlier, Mike Friday's reign as England Sevens coach ended earlier than he would have liked as his team bowed out in the semi-finals in a tense 10-7 loss to South Africa.
The England team were booed at stages and clearly were not the favourites of the home crowd but did put up a better performance than in Dubai.
However, Paul Treu's side had the final say, just as they did at the same stage of the competition in Dubai a week ago and ensured a repeat final against New Zealand.
Kabamba Floors immediately had the crowd on its feet when Van der Merwe made a monster rip off Charles Amesbury and set the blond flanker on an 80-metre run.
England struck back on the five-minute mark as they stretched the Boks from side to side until Michael Hills trotted in untouched to level the scores.
Golling kicked a vital conversion from the sideline to put his side ahead by two, a lead they kept into the half-time break.
The second half turned out to be a massively tense affair, with both sides taking too much contact and tempers rising at stages, prompting referee James Jones to talk to both captains to calm their players.
The Boks broke the deadlock as they stretched England to all sides, and finally found a gap where try-scoring machine Burger sped in for what turned out to be the winning try.
There was further tension when Dusty Noble pushed Amesbury outside the field of play and was yellow carded for his efforts.
Down to six men, Floors won a vital penalty at the ruck shortly afterwards to ensure the Boks could simply put the ball out for the victory.
In the other semi-final, New Zealand stunned World Champions Fiji to pull away to a 29-0 lead before their opponents scored two consolation tries to lose 29-12.
In the Plate final, tries by Tal Selly, Martyn Thomas, Rhodri McAtee and Alec Jenkins gave Wales the title as they ended a successful tournament on a high.
Australia won the Bowl 41-7 against a Kenya side who disintegrated as the game went on, while Portugal took the Shield with a 14-12 win over Zimbabwe.