The Aussies bowled England out for 218 on day five in Perth, securing victory by an innings and 41 runs to give the home side an unassailable 3-0 lead in the series.
The Poms have surrendered cricket's most prestigious trophy, which was won in the 2015 Ashes series in England.
But just as Australia did in 2013-14, it snagged bragging rights with a comprehensive victory at the WACA. Four years ago George Bailey caught Jimmy Anderson at short leg to complete the carnage, and this time the slaughter came to an end when Chris Woakes edged Pat Cummins through to wicketkeeper Pat Cummins.
"The boys have done a terrific job. Really proud of everyone in the dressing room," captain Steve Smith said.
"What an amazing feeling. To win an Ashes series, my first as captain, to be 3-0 up and get the urn back is bloody incredible.
"The way we've gone about this has been spectacular."
The Poms started the final day hoping for a miracle — and it looked like their prayers may have been answered. Rain had made its way onto the pitch resulting in several wet patches that delayed the start of play.
The ground staff used leaf blowers to try and dry the deck and despite the England camp being angry at the prospect of batting on a strip that was always going to prove hard work, the first ball of the afternoon was finally bowled more than two hours after the scheduled start of play.
England 403 and 218
Australia 9/662 dec.
Wickets tumble as Anderson hit
Nathan Lyon dropped Craig Overton at leg gully off Pat Cummins' bowling.
Overton turned a short ball off his rib cage straight to Lyon, but he was unable to hold onto the chance down low.
The off-spinner left the ground after injuring a digit, blood dripping from the tip of his index finger on his right hand.
But Lyon's mistake didn't cost much, Overton getting a leading edge to Usman Khawaja at a regulation gully the following over for 12.
That was Hazlewood's fifth wicket for the innings and eighth for the match, then Cummins joined the party when he had Stuart Broad on the hop. Broad got a feather on a short ball and was caught by wicketkeeper Tim Paine.
Cummins greeted new batsman Jimmy Anderson with a ferocious bouncer first up, shaking him up by smashing the fast bowler on the helmet. Anderson went down on his haunches as medical staff came out to treat him.
England unhappy over start time announcement
Umpires have made a decision that lunch will begin at 5pm with the aim of the second session of play beginning forty minutes later.
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Live updates: Play resumes for England vs Australia
England captain Joe Root was visibly "frustrated" after being told the news, according to Channel 9 commentator Mark Nicholas.
Match officials are still hopeful of at least 60 overs being bowled before the end of the day.
The second session of play will be from 5.40pm to 7.10pm. The last session of play will be from 8.30pm to 11.30pm.
'Embarrassment' for Australia
The Waca pitch debacle is an appalling "embarrassment" for Australian cricket, veteran cricket correspondent Robert Craddock reckons.
The cricket scribes damning appraisal of the Waca's failure to protect the wicket from the elements comes as the chances of play resuming continued to deteriorate.
Bookmakers have begun listing the draw as the favoured result of the Third Test.
Australia were strong favourites, despite the gloomy weather predictions, at stumps on day four, but the home team's odds of wrapping up the Ashes in Perth have been blown out by the shocking soggy Waca deck.
"Crazy scenes here at the Waca," commentator Mark Nicholas told Channel 9.
Hidden threat to Aussie test victory
Former Aussie Test captain Michael Clarke has questioned how on earth the pitch covers could have been penetrated by rain.
He said with the amount of technology and money in the game it is a shame that a simple blemish like the coverings on a pitch could still have such a dramatic influence on the game.
"You think these days with the money in the game how have we got covers with holes in them," Clarke questioned on Channel 9.
Clarke also said the real concern for Australia is that ground staff will not be able to dry the turf underneath the Waca pitch top grass with the leaf blowers being used.
If the grass on top of the deck is dry, but the pitch remains soft underneath, umpires will be under pressure to abandon play because the conditions will be declared too different to the ones presented on day four.
"It's about what it's like underneath, that's the biggest concern for the umpires," he said.
Match in doubt over pitch bungle
Test legend Shane Warne has sensationally declared England has a case to have play abandoned in the Third Test as a result of water soaking through the pitch on the morning of day five.
Warne said England captain Joe Root will be petitioning for the match to be abandoned because the pitch is not fit for Test cricket.
It comes after wet, wild and windy conditions saw the covers blow off the Waca square.
"Maybe there is something there for play to be abandoned," Warne told Channel 9.
"I'd be picking up a big stink if I was Joe Root.
"All I'm saying is that Joe Root could throw up an argument to say, 'Has there been enough rain that's got through the hessian, through the covers, that's got onto the pitch and changed the nature of the pitch'.
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The on-field umpires and match referee are yet to make a decision on if play will go ahead, however umpire Chris Gaffaney told Channel 9 play will only commence on day five when the pitch is just as dry as it was on day four before the wet weather struck.
Gaffaney said the ground staff have been frantically trying to dry the soaked area of the pitch with leaf blowers.
He said it remains unclear how the pitch covers failed to protect the deck from the rain over night.
Former Aussie Test great Ian Healy joked members of the Barmy Army may have tried to tamper with the covers at the end of day four to boost their team's chances of surviving on day five.
England coach Trevor Bayliss said his team is prepared to play on Monday — but only if the pitch is dried to their level of satisfaction.
"There's a few soft spots in the wicket, but we're more than prepared to come out and play if we can get it as close as we can to yesterday," he told Channel 9.
"Whatever the umpires say, that's what we'll do.
"It's unfortunate really. It was going to be a good day of cricket, I think. It still might be at some stage today."
Aussie coach Darren Lehmann said the pitch already "looks pretty good".
Australia's decision to bat on to their total of 9/662 on day four has been criticised by Aussie cricket great Dirk Nannes, who earlier said Steve Smith' may come to regret his decision not to declare earlier.
12.30pm
Groundstaff blunder boosts England miracle
A blunder from the WACA ground staff has boosted England's chance of a great escape with the Perth pitch soaked through on the morning of day five.
Water has reportedly soaked through the covers, leaving staff to frantically try and dry the pitch out before the start of play.
Smith's captaincy questioned
Former Aussie international Dirk Nannes has questioned if Steve Smith has regrets about non declaring earlier on day four at the WACA.
Nannes reckons Australia would already be celebrating the return of the urn and a 3-0 series lead if Smith had pulled the pin on Australia's first innings score of 9/662 and given the Aussie bowlers more than 38 overs at the end of the day before predicted rain stopped play.
Nannes says he still expects Australia to win back the urn on Monday — despite the rain — but believes it would already be all over if Smith had been more aggressive with his captaincy.
"I just wonder in hindsight whether they're going to be a little bit upset about the declaration," Nannes told ABC Grandstand.
"At the time you looked at the forecast and thought maybe they should have come off a little earlier. If they were one more wicket down, you feel like Australia could have just run through them this afternoon."
Josh Hazlewood told the ABC he is not worried about Smith's late declaration and said Australia would have continued to bat on day four if not for the Perth weather forecasts.
"We knew the cracks were going to get bigger and hopefully we come out tomorrow and they're bigger again," he said at the end of day four.
"We probably would have batted a bit longer if there was no rain around, but as we saw this afternoon and potentially tomorrow, we probably pulled them off earlier then we would have."