Following a tight and nervy 90 minutes, the game required extra time, and a Carlos Mendes Gomes penalty proved to be the difference in the additional 30 minutes, despite television replays showing that Ryan Haynes' foul on John O'Sullivan was outside the area.
Story of the match
The first action of the game saw a foul on the halfway line go Morecambe's way, but a quick free kick was fired wide by Carlos Mendes Gomes. Newport 'keeper Tom King then had to be alert to race off his line to deal with a long ball over the top, as the Shrimps started the better side.
Kyle Letheren had to catch Mickey Demetriou's long throw at the other end, but failed to collect a second as penalty appeals were waved away after Scot Bennett hit the deck.
There were more calls for a penalty moments later but again referee Bobby Madley said no. Morecambe countered in response, but failed to get an effort on goal.
Sheehan curled wide after Padraig Amond won a corner, and Matt Dolan's free kick failed to find an amber shirt after Ryan Haynes was fouled. Soon after, a round of applause could be heard round Wembley in memory of former Morecambe defender Christian Mbulu, who died in May 2020 aged 23.
Aaron Wildig fired well over for Morecambe as the half time break neared, and Aaron Lewis mirrored his effort at the other end, firing the ball into the Morecambe faithful.
Liam Gibson saw perhaps the best chance of the game blocked by Liam Shephard, before Morecambe captain Sam Lavelle headed the resulting corner wide.
Bennett then saw an effort dip agonisingly wide at the other end, but things were level going into the break both in terms of the scoreline and on-the-pitch play.
Neither manager blinked at the break, and County captain Labadie won an early corner for his side. Newport tried one off the training ground however, and it didn't pay off.
Lewis Collins forced Letheren into a low stop, before Newport manager Michael Flynn made a double chance, replacing Lewis and Dolan with Ryan Taylor and Anthony Hartigan.
Ryan Cooney tested Tom King from distance as Morecambe tried to gain a foothold in the game, but a drinks break halted momentum in the 26 degree Wembley heat.
Letheren produced a fine one-handed save to deny a Shephard effort destined for the bottom corner, and Michael Flynn introduced Kevin Ellison - the man with over 350 appearances for Morecambe that celebrated in front of former boss Derek Adams earlier this season - in an attempt to keep up his teams' pressure.
Normal time could not separate the teams, however, and Bobby Madley soon blew for extra time ahead of an additional 30 minutes.
Cole Stockton headed wide from a tough angle in the opening moments of extra time, and Newport continued to try and utilise their long throw, but didn't get too much success.
Newport should have been ahead just before the interval. Good work from substitute Nicky Maynard resulted in a low cross in front of goal, but Labadie skied his effort from just yards out, with Ellison stretching in front of him.
The start of the second half of extra time saw pure choas. When John O'Sullivan hit the deck under a challenge from Ryan Haynes, referee Bobby Madley gave a penalty. Replays showed contact was outside the box, and it was heartbreak for Newport and ecstasy for Morecambe - who won't care one bit about the decision - when Mendes Gomes sent King the wrong way from the spot to put his side ahead.
A half-chance for Kevin Ellison came to nothing as Newport pushed and pushed, but it was once again Wembley heartbreak for Michael Flynn's men as Morecambe won promotion to League One in London.
Takeaways from the match
Dreamland for Morecambe
Morecambe reached League One for the first time in their history on Monday and their fans will have thought they were dreaming. Derek Adams has transformed the long-standing League Two side and will now get a crack at League One football for the first time in the club's existence.
Newport Wembley hoodoo continues
The Exiles had lost three of their last four games at Wembley going into the match, and that record is now four from five as their dismal record at the home of football continues. They will feel hard done by, but will have to go again next season.
Carlos Mendes Gomes
Mendes Gomes is Morecambe's poster boy and he delivered on the biggest stage on Monday, scoring the penalty to put his team ahead in extra time. He threatened going forward throughout, and made the difference on the day.
Only an extra time substitute but his driving runs gave Morecambe a new angle of attack in the extra 30 minutes. Although contact was outside the box, he won the penalty and helped his team into League One.
Morecambe: Letheren, Cooney, Lavelle, Knight-Percival, Gibson (Mellor 106), Songo'o, McAlinden (Lyons 75), Wildig (O'Sullivan 91), Diagouraga, Mendes Gomes (Kenyon 114), Stockton.
Subs not used: Halstead, Davis, Pringle.
Newport: King, Shephard, Bennett, Demetriou, Lewis (Taylor 63), Hartigan, Sheehan, Dolan (Hartigan 63), Haynes, Amond (Maynard 79), Collins (Ellison 86).
Subs not used: Townsend, Farquharson, Ledley.