Gareth McKeown was the hero as Crusaders deservedly won the Setanta Sports Cup, after a nail-biting penalty shoot-out.
Rory Patterson looked to have won it for Derry when he opened the scoring in the 80th minute but Colin Coates struck the equaliser five minutes later. There was more time for drama as Stephen McBride was shown a second yellow card in the final minute of ordinary time.
With the match in extra-time, ten-man Crusaders hit the front for the first time when Coates got his second of the afternoon but a penalty six minutes later handed Derry a lifeline.
Patterson stepped up to take the spot-kick and though Crues keeper Sean O'Neill got a hand to the ball, he was unable to prevent it sneaking in at his left-hand post.
And so it went to penalties and after one miss for each side after five penalties, it went to sudden death.
Dermot McCafffrey had the misfortune to see his spot-kick kept out by Crues keeper Sean O'Neill and that left the way open for substitute McKeown to strike the winner low and hard to the keeper's right.
The Crues had the first chance on four minutes when David Rainey's flick found Timmy Adamson, who did well to hold off McCaffrey, but his left footed shot from 12 yards was kept out by City keeper Gerard Doherty.
Stephen Baxter's side continued to dominate things and the woodwork came to City's rescue on 10 minutes.
Midfielder Chris Morrow watched his left wing free-kick from the edge of the box, being turned onto the post by Doherty, before Ryan McBride cleared the loose ball.
In what was a disappointing opening 45 minutes it was the Shore Road men who were the happier of the two sides at the break, as although the Candy Stripes started to come more and more into the game, it was them who had the better chances.
In fact Derry failed trouble Crues keeper Sean O'Neill throughout the first half, as their place let them down in the final third.
The tie finally sparked into life when firstly Rory Patterson saw his
looping header come back off the bar, but it was Stephen Baxter's side who went straight up the other end and missed another golden chance to take the lead.
Brentford bound Stuart Dallas raced clear of Ruaidhri Higgins on the half-way line before laying the ball off to Morrow and his pile driver from just inside the box was superbly kept out by Doherty and Declan Caddell's follow-up shot, after City failed to clear, flew well over the bar.
A Dallas corner on 61 minutes found an in-rushing Adamson, but the big striker's powerful header from close range, rattled the bar.
Derry's first chance of the final came on 62 minutes when David
McDaid's right wing cross found an Stephen McLaughlin, but his side-footed shot while on the stretch trickled just past the post.
Soon after Rainey broke the offside trap, but the experienced
striker's tame left footed strike, when team-mates were in a better
position inside the six yard box, was easily gathered by Doherty.
On 76 minutes more good hold up play by Rainey saw the striker get himself some space 25 yards from goal and his left footed effort was tipped over by Doherty.
Ten minutes from time the all important goal came against the run of play for the League of Ireland men.
Dermot McCaffrey's centre from the left found substitute Owen
Morrison who showed great composure by playing a neat pass to Rory Patterson and with his only chance of the game the ex-Linfield man side footed home from close range.
The Hatchetmen levelled things on 86 minutes when Dallas' free-kick into the danger area, drew Doherty from his goal-line and although he looked to be fouled by Rainey, Colin Coates made no mistake heading home, much to the anger of the City men.
Crusaders were rightfully reduced to ten men on 92 minutes when
Stephen McBride was shown a second yellow card followed by a red after his terrible tackle on Simon Madden.
On 95 minutes Declan Caddell broke clear but with only Doherty to
beat the midfielder was denied by a tremendous last ditch tackle by
defender Ryan McBride.
Coates netted his second goal of the final when another Dallas corner this time wasn't dealt with by Doherty and the big skipper was on hand to turn home the loose ball.
Patterson levelled things again from the penalty spot on 102 minutes when his shot was handled by Paul Leeman inside the box and referee Raymond Crangle rightfully pointed to the spot, from which the Northern Ireland international just about crept past the full stretched O'Neill.
Crusaders: Sean O'Neill, Stephen McBride, Paul Leeman, David Magowan, Colin Coates, Chris Morrow, Timmy Adamson, David Rainey, Declan Caddell, Stuart Dallas, Aidan Watson.
Subs: Gareth McKeown for Adamson (91); Matthew Snoddy for Rainey (96); Ciaran Gargan for Caddell (111).
Derry City: Doherty, Madden, S McEleney, McBride, McCaffrey; P
McEleney, Molloy, Higgins, McLaughlin; McDaid, Patterson.
Subs: Morrison for McLaughlin (63); McCallion for McBride (106).
Referee: Mr Raymond Crangle (Belfast).