Birmingham coach Dougie Brown claimed his side's NatWest t20 Blast title as the reward for three years of progress.
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Andrew Flintoff returned to the Lancashire side and came in to hit huge sixes to pull his side off the ropes, but it was not enough as the Bears hung on to win by four runs.
"Oh man, Twenty20 never fails to disappoint," Brown told Sky Sports 2. "I thought we had it in the bag and then 'Freddie' hits a couple and all of a sudden it's game on again.
"Credit to (Chris) Woakes, he did exceptionally well and it's just amazing to get it over the line. It was a complete rollercoaster of emotions.
"We've done really well and come on as a side massively in the last 2-3 years so to get across the line here on our home ground is incredible."
Flintoff, called in as a late replacement for the injured Kabir Ali, removed former England team-mate Ian Bell with his first ball - celebrating with his familiar arms outstretched pose - and returned at the 11th hour to take his side to within touching distance with two muscular sixes in the penultimate over.
He appeared on the cusp of a match-winning intervention but with 14 still needed from the last six balls Woakes, one of Flintoff's successors as an England all-rounder, sent down a superb over to make sure his team won the competition for the first time.
"He's still got it hasn't he?" Woakes said of Flintoff. "There was some good striking at the end there and it's just great to close it out. Your heart is going for the whole 20 overs. You know you're not that far away from the trophy but there's still a lot of work to do and I'm just delighted for all the boys who have put in work over the whole tournament, not just today."
Lancashire captain Paul Horton admitted Flintoff's batting display had made believers of his team-mates.
"It looked that way at one stage with Freddie whacking them out of the ground, but all credit to Warwickshire," he said. "They've had a fantastic campaign, they had a wonderful win in the quarter-finals and a great win today. All credit to them.
"It was a shame, we didn't win a toss all day. We felt at the half-way point we could get them. It was a good wicket. It's just a shame we didn't get over the line. A couple of things didn't go our way and that's the game, but all credit to Warwickshire."