Extra-time was on the horizon in a tense affair at Barnet FC’s Underhill Stadium, but Arsenal struck the fateful blow eight minutes from time.
The Gunners pressure finally told as Little broke down Birmingham’s resilient backline with a magnificent strike from the edge of the ‘D’.
The night could have been all so different if Eni Aluko’s attempt hadn’t missed the far post by a matter of inches on nine minutes.
But for the odd Blues chance, it was Laura Harvey’s team who were in the ascendancy during the 90 minutes.
The Gunners regularly pinned Birmingham back in their own area, although the Londoners best opportunity in the first-half arrived from a dead ball situation on 35 minutes.
Arsenal won a free-kick 25-yards out from Rebecca Spencer’s goal, and the former Gunners stopper could only stand and watch as Kelly Smith hit the top of the bar.
Before that incident Spencer also saw Stephanie Houghton’s strike slip through her hands – thankfully the ball drifted out for a corner.
David Parker’s side managed to cause a scare late on in the first 45 minutes, with Aluko beating the offside trap and forcing Emma Byrne to claw the ball away as the bottom corner beckoned.
More Blues defending was required early in the second-half, while some wasteful finishing by the WSL Champions helped Birmingham’s cause.
White missed an open goal when heading wide from a couple of yards out, then shortly afterwards Spencer parried away the forward’s stinging drive.
The DCS Stadium outfit withstood copious amounts of pressure and conjured up their best opening of the contest, with Williams rounding Byrne, but the versatile forward couldn’t apply the finishing touch – and fired wide.
Then on 68 minutes Spencer pulled off a spectacular stop, to keep out Smith’s free-kick, while Gemma Davison cracked Spencer’s left upright on 79 minutes.
As extra-time moved ever closer Arsenal broke Blues’ hearts, when Little had to produce her very best to break the deadlock in the 82nd minute.
Birmingham threw everything at their London rivals but the closest they came was when Jo Potter’s corner somehow missed a number of Blues players on the line.
And Chelsea Weston was then called into action to prevent an Arsenal second by clearing Davison’s shot off the line.
Nevertheless, despite missing out on Continental Cup glory, Blues still won the FA Women’s Cup and qualified for next season’s UEFA Women’s Champions League for the second consecutive campaign.
Arsenal (in numerical order): Emma Byrne, Stephanie Houghton, Gilly Flaherty, Ciara Grant, Ellen White (Gemma Davison 64), Rachel Yankey (Danny Carter 90+1), Kim Little, Katie Chapman (C), Niamh Fahey, Alex Scott, Kelly Smith (Jennifer Beattie 78).
Subs not used (in numerical order): Yvonne Tracy, Bianca Bragg, Sophie Harris, Jayne Ludlow.
Goals: Little (82)
Bookings: Houghton (70)
Blues: Rebecca Spencer, Chelsea Weston, Laura Bassett (C), Emily Westwood, Rachel Unitt (Izzy Christiansen 70), Karen Carney, Jade Moore, Jo Potter, Kerys Harrop, Rachel Williams, Eni Aluko.
Subs not used: Marie Hourihan, Emily Simkins, Anna Wilcox, Hannah George, Marie Ballard, Cristina Torkildsen.
Player-of-the-match: Kim Little
Referee: Rob Ellis
Attendance: 2, 535