The home team came into final day with the score on 103-4, with still a long way to go to reach their 373-run target, but had kingpin Joe Root still at the crease.
England batting unravelled quite quickly on the fifth morning as Emilio Gay was the first to walk back to the pavilion, edging behind off seamer Nathan Smith for 10.
Then in the same over it was disaster for the hosts when Root was run-out after Henry Nicholls had a superb direct-hit that left the champions batter short after Jamie Smith had called for a quick single.
The Black Caps could sense victory was close but Smith and Gus Atkinson then stood firm for a stubborn 75-run partnership.
The stand was broken when Atkinson fell lbw to left-arm spinner Micthell Santner for 19 while Jofra Archer did not long before he was dismissed for 2.
Smith went to his half-century but Josh Tongue was also run-out with another direct hit from Santner before the victory was sealed when Smith was out for 60.
New Zealand became the first time ever to win a Test series in England after going 1-0 down following the defeat at Lord's in the first Test.
The series will be remembered for the chaotic retirement of England captain Ben Stokes but the tourists will not care one bit as they move up to third in the World Test Championship table.
Ben Stokes' glittering international career is poised to end in defeat after New Zealand tightened their grip on the deciding third Test at Trent Bridge, leaving England needing a near-miraculous chase on the final day.
Ben Stokes will retire from international cricket and step down as England's Test captain at the end of the ongoing series decider against New Zealand, bringing a remarkable 15-year career to a close.
England surrendered control of the third Test at Trent Bridge as New Zealand ended day three in a commanding position, closing on 120-3 in their second innings to lead by 204 runs.
Ben Duckett scored a century as England made a strong reply with the bat after bowling New Zealand out for 438 on the second day of the third and deciding Test at Trent Bridge.
