Australia 318 (Labuschagne 63) and 262 (Marsh 96, Carey 53, Hamza 4-32, Afridi 4-76) beat Pakistan 264 (Shafique 62, Masood 54, Cummins 5-48, Lyon 4-73) and 237 (Masood 60, Salman 50, Cummins 5-49, Starc 4-55) by 79 runs
Captain Pat Cummins produced an irresistible spell late on day four to crush Pakistan's audacious chase of 317 as Australia claimed a 79-run victory in the Boxing Day Test to clinch the series.
The topsy-turvy contest appeared set for a tense final day finish when Mohammad Rizwan and Agha Salman combined for an enterprising 57-run partnership.
They moved Pakistan to 219 for 5 and needing 98 runs for a remarkable series-levelling victory as the match appeared to be heading towards a knife's edge by stumps.
But 10 minutes before the scheduled close of play, Rizwan attempted to sway out of the way of a short delivery from Cummins and dropped his wrists as the ball flew past.
Cummins appealed vigorously in a belief that the ball had touched Rizwan's wrist band and he was proven correct on DRS. Rizwan was incensed that the decision was overturned as Cummins celebrated his 250th Test wicket and shortly after had Aamer Jamal caught and bowled.
Cummins took the extra 30 minutes in a bid for victory and dismissed Shaheen Shah Afridi to claim his 10th wicket for the match. It capped another heroic performance from Cummins, who had turned the match on its head with a spectacular spell late on day two that included a gem of a delivery to clean bowl Babar Azam.
Mitchell Starc claimed Salman and Mir Hamza in consecutive deliveries as Pakistan lost 5 for 18 to slump to their 16th straight defeat in Australia.
It was a bitter disappointment for Pakistan, who batted with dare and had shown plenty of fight throughout the Test match. Apart from their late collapse, Pakistan will also rue conceding 52 extras in Australia's first innings and a drop catch on day three from Abdullah Shafique at first slip when Mitchell Marsh was on 20. He went on to make 96 to help Australia set a daunting total of 317.
Pakistan did bat boldly with captain Shan Masood making an aggressive half-century and Babar hitting 41.
Pakistan's unlikely hopes were raised when Masood and Babar combined for a 61-run partnership after coming together at 49 for 2. But they both fell either side of tea as the pressure fell onto Rizwan, who won back his position into the team over Sarfaraz Ahmed.
Having made an attractive 42 in the first innings, Rizwan further justified his selection until Cummins prevailed on a MCG surface which offered seam movement and variable bounce throughout.
Pakistan did present a sterner challenge than many expected. Facing a tough 40-minute period before lunch, Pakistan had started poorly when Shafique was dismissed for 4 by Starc.
In a frenetic passage before the interval, Masood successfully overturned a lbw decision after lunging forward to offspinner Nathan Lyon and opener Imam-ul-Haq survived a dropped return catch from Starc.
Imam didn't scored until his 18th delivery, but tried to bat more proactively after lunch. But his struggles reared when Cummins bowled around the wicket with Imam trapped lbw in a decision upheld by DRS.
Babar readied to renew his battle with Cummins, but faced a thorough examination initially from quick Josh Hazlewood who had a loud shout for lbw as Australia unsuccessfully reviewed.
There was much anticipation over how Babar would confront Cummins having fallen to him in two consecutive innings.
He again had a tough time against Cummins and was comprehensively beaten by consecutive deliveries on a perfect length. But he survived and started to find his rhythm alongside Masood, who motored to his half-century in 57 balls with his father and brother watching in the terraces.
Masood initially played Lyon mostly along the ground before charging down the track for a boundary through the on-side. It was a similar tactic Masood used during his half-century in the first innings before he holed out.
But Cummins once again provided the breakthrough when Masood edged to Steven Smith, who took a sharp catch low down at second slip.
Pakistan's hopes seemingly rested with Babar, who had handled Cummins far better before tea and used his feet to attack Lyon. But Babar was helpless against a brilliant delivery from Hazlewood that nipped back and rattled into the stumps much like Cummins' magical ball late on day two.
After dismissing Babar for the seventh time in Test cricket, the normally mild-natured Hazlewood celebrated enthusiastically with a leap in the air as Australia smelt blood.
Hazlewood continued his brilliant spell by bowling with pinpoint accuracy to dry up the scoring and Saud Shakeel's frustrations boiled over when he nicked off attempting an extravagant cut shot off a short Starc delivery.
There appeared the possibility that Pakistan could crumble quickly much like in Perth, but Rizwan and Salman were defiant and unfurled cavalier strokes to fluster Australia.
Rizwan got off the mark with a slog sweep for six then drove Starc exquisitely through the covers. Salman was hit in the helmet by a short delivery from Starc and required medical attention. He preferred facing Lyon and hammered him for consecutive boundaries.
Rizwan overcame a torrid period late in the day when he edged Hazlewood through a vacant third slip and survived a couple of tough chances in a Lyon over.
But Cummins stepped up in another late twist and Australia were left feeling also grateful for their lower-order wagging earlier in the day.
Resuming at 187 for 6, with a lead of 241, Australia added valuable runs with under pressure Alex Carey scoring a half-century.
Carey was the last batter dismissed as Australia were eventually bowled out for 264 and finished with a lead that they defended with aplomb despite several scares.