The young City forward, coming into the tie on the back of an outstanding individual tournament, started once again for Lionel Scaloni’s side in Lusail before being replaced by Lautaro Martinez.
While La Albiceleste were the dominant force for almost 80 minutes, they ultimately had to do it the hard way after two goals in the space of three minutes from Kylian Mbappe cancelled out Lionel Messi and Angel Di Maria’s first half strikes to force extra time.
Messi would tap home on the rebound in the 109th minute to seemingly see the Argentines over the line, but Mbappe would once again draw the French level from the spot in the 116th minute.
It meant that a truly outstanding match, worthy of its grand occasion, was decided by the lottery of a penalty shootout, with misses from Kingsley Coman and Aurelien Tchouameni handing Alvarez and co. a third-ever World Cup triumph.
And with former City defender Nicolas Otamendi also lining up for Lionel Scaloni's side for his 100th international cap, it was a truly memorable day for all involved at the Club.
There was no question that Alvarez and Argentina started the showpiece the brighter, with the City forward testing Hugo Lloris in the early stages.
And while he was flagged offside, it was a precursor to a match which seemingly looked like one-way traffic from the get-go.
Di Maria fired over Rodrigo De Paul’s cutback in the opening 16 minutes as La Albiceleste continued to turn the screw, and the PSG winger would be at the centre of the game’s opening goal when he was felled by Ousmane Dembele inside the area soon after.
Messi stepped up to do the honours, sending Lloris the wrong way from 12 yards for his sixth goal of the tournament, becoming only the third player in World Cup history to score in every round including the final.
SHOP: JULIAN ALVAREZ'S CITY RANGE
It was two before the break, as Alvarez combined with Messi on the counter before playing Alexis Mac Allister in behind the France defence.
The Brighton midfielder squared for Di Maria, who tapped home to double the advantage.
France manager Didier Deschamps rolled the dice, making a double change with the match barely 40 minutes old, but Argentina continued to dominate with Alvarez forcing Lloris into a near-post save soon after the restart.
One of Les Bleus’ substitutes, Randal Kolo Muani squandered his nation’s first real chance when he headed wide of the near post, sending the effort wide of the near post.
But the deficit would be halved on 78 minutes through Mbappe, who made no mistake from the penalty spot after Kolo Muani was brought down inside the area by Otamendi.
And a startling turnaround was complete just three minutes later, with Mbappe once again on target.
The French talisman, quiet for so long, combined with Kolo Muani before sending a powerful volley past the despairing dive of Martinez to draw the 2018 winners level.
Adrien Rabiot was next to go close with Martinez smothering his effort through a crowd of bodies at the second attempt, but the French were indebted to Lloris for an incredible reaction save to deny Messi deep into stoppage time in a breathless finale.
Into extra time, and Alvarez would be replaced by Martinez, who would see a goalbound effort blocked by Dayot Upamecano in the 104th minute.
And the forward would once again be thwarted by the French defender before the break, who nicked the ball away at the last minute as he shaped to shoot.
Argentina were in need of inspiration, and it came from a familiar source, when Messi fired home after Martinez’s original effort had been parried away by Lloris in the 109th minute.
La Albiceleste were almost over the line, but Mbappe would pounce once again to become only the second player in World Cup history to score a hat-trick in the final.
The French forward saw his effort handled inside the area in the 117th minute, and duly dispatched his second spot kick of the match to once again draw Deschamps’ men level.
Mbappe’s outstanding individual display continued when his searching cross was centimetres from the head of Kolo Muani, before an outstanding one-on-one save from the Argentina stopper denied the France substitute at the death.
There was still enough time for Lautaro Martinez to squander a gilt-edged chance with his head at the other end, but a memorable World Cup final would ultimately be decided on penalties.
And it was Aston Villa stopper Martinez who would prove the hero, saving efforts from Coman and Tchouameni to allow Gonzalo Montiel to dispatch the winning spotkick.
It sparked incredible scenes of jubilation in Qatar, as Alvarez and Argentina celebrated a historic third World Cup triumph.