Nathan Delfouneso again showed his immense promise with two goals for the Villa reserves at Old Trafford.
But the young striker was unable to prevent the Claret and Blue second string suffering end of season heartbreak as Manchester United claimed a win on penalties in the national showpiece.
Captain Ciaran Clark thought he had sealed back to back national championships for the Villa reserves, with an 81st-minute strike, after arch-finisher Delfouneso had twice put them ahead.
But Seneglese star Mame Biram Diouf netted an 88th minute equaliser for the Reds, to add to his earlier strike and one from Federico Macheda.
And United's class told in the shootout as England stopper Ben Foster saved from Delfouneso and James Collins jnr after scoring what proved to be the winning penalty for his side.
It may have been a tale of woe in the end for Kevin MacDonald's men but they can be proud of their achievements this season as they claimed the Barclays Premier League Reserve South title for a third successive year.
And the bright spark of the campaign has undoubtedly been Delfouneso, who, in a sign of his rapid improvement, now looks too good for second string level.
That can only please first team boss Martin O'Neill, who will be monitoring the youngster very closely over the summer to see whether he is able to start up front alonsgide another academy graduate, Gabby Agbonlahor, next season.