The retired GP surgery manager became the oldest winner of the competition at the age of 60, and beat fellow finalists Luis Troyano, a 42-year-old graphic designer, and Burr, a 37-year-old builder, to win the prize.
The grandmother was named “star baker” in week one of the series. In contrast, Burr took the title a record five times, including a hat trick run up to the final meaning he had had become the favourite to win.
Judge Mary Berry praised Birthwhistle’s “quiet determination” while Paul Hollywood said her baking was “close to perfection”.
The trio were faced with completing the toughest challenges of the series, finishing with a towering “piece montee” as their showstopper, with sponge, caramel, choux pastry and petit fours, completed in five hours.
Nancy leapt ahead during the technical challenge, coming first with her array of tartes au citron, Victoria sponges and scones, while Burr blew it by coming last.
Birtwhistle, originally from Hull, said the moment the winner was announced was an emotional moment, after 10 weeks of competition in which they had undertaken 30 separate challenges.
She said: "I can remember having to stand for what seemed an eternity to hear the result. I looked at a tree in the distance and focused on that rather than looking at the judges, and felt what will be will be.
"We were all pretty exhausted, Luis was close to tears, and Richard looked the same. I took a big gulp, and realised that this moment was like knowing the snowman is going to melt and it will never be the same again. So it was quite a poignant time for all of us."
Berry said: "You never know how the bakers will be affected as we go through filming week by week, but Nancy remained constant throughout. I think it was her quiet determination that drove her through, and the fact that she never really lost her cool.
"It was a close run when it came to judging the final, but Nancy is deservedly our winner and I must admit that I have been inspired by her baking. The bakers have been so keen, so creative and the results have been mindblowing. It's been a real joy to judge this year."
Hollywood said: "Nancy has been confident, creative and unafraid as a baker and that showed from the very start. In one of my judgings I called her close to perfection, so that says it for me.
"This series has been one of the best for me, as we have had great bakers who have built on their baking expertise each week. They have shown both a depth of knowledge and a sense of humour, you really couldn't have asked for a better bunch.
'They have really pushed the boundaries of technique this year. The style, the finesse and the precision - the class of 2014 have been exceptional," he added.
Additional reporting by PAReuse content