It also marks a huge career achievement for former Australia mentor Eddie Jones, who has steered England into second place in the world rankings with the result, leapfrogging the Wallabies in the process.
Australia conceded nine penalties to eight, and while some of referee Craig Joubert's decisions were puzzling, the cold, hard reality was they weren't good enough to win.
The Wallabies too often punished themselves with mistakes and bad choices - making an incredible 13 handling errors to England's four - and failed to score at all in the second half.
England, meanwhile, completed four times as many tackles as Australia, hanging on for dear life for much of the evening.
The match was marred by the unstable surface at AAMI Park, which consistently tore up under the weight of scrums in an embarrassment for the Australian Rugby Union.
By fulltime, despite furious attempts by ground staff to fill the divots, parts of the field looked more like a cow paddock than a suitable test venue.
Both sides scored a converted try from rolling mauls in the first half - England's through Dylan Hartley in the 19th minute, and Australia's through captain Stephen Moore in the 35th.
But England went into the break 10-7 ahead, confident and comfortable with where they had the Wallabies.
Tensions boiled over early as a head-high tackle on Nick Phipps by Chris Robshaw sparked an all-in brawl, but the penalty awarded to Australia was reversed because Joubert deemed Moore "inflamed" the situation by going in with his shoulder.
It was proof the Wallabies weren't afraid to give England a taste of their own niggling tactics, while TV cameras also caught Michael Hooper throwing churned-up dirt in the face of England's James Haskell during a scrum.
Moore said he was gutted by the result.
"We've got to own this. I feel for the fans," he said.
"England deserved to win both tests and we've got to be better.
"They defended really well. We made a fair few errors in attack so that was disappointing. We probably didn't build pressure there at crucial times."
Hartley said England's pride had been "hurt" by conceding four tries in last weekend's series opener in Brisbane.
"The key focus this week was defence and we put bodies on the line and got some good shots in and kept the score down," he said.
"We'll enjoy this bit of history right now, but the message is we go again next week and we finish the tour proud."
- AAP
