Cape Town City FC coach Eric Tinkler named an unchanged side from his side's previous fixture. Meanwhile, Gaston Sirino was ruled out for Sundowns.
Rivaldo Coetzee looked to put Sundowns on their way after just six minutes as went for goal from long range, but his strike was kept out by City goalkeeper Hugo Marques.
Soon after, City responded with a chance of their own as Mduduzi Mdantsane got into the danger area and met a ball in at the near post by Thamsanqa Mkhize, but he failed to hit the target with his time effort.
The opening goal arrived in the 24th minute as Taariq Fielies lost possession of the ball to Thabiso Kutumela who surged into the box before picking out Thapelo Morena for the close-range finish.
There were further chances at either end as Denis Onyango produced a good save to keep out Craig Martin while Kutumela forced Marques into a decent save before the break.
The game was on the edge in the early stages of the second stanza, with both sides getting chances while Themba Zwane went close to making it 2-0 with a first-time strike on the edge of the box that came off the frame of goal.
However, Morena had a much clearer chance for Sundowns in the 67th minute but he was denied by Marques in a one-on-one inside the box.
Tinkler made a double change 20 minutes before time, as Mpho Makola replaced Mduduzi Mdantsane for fresh legs and Terrence Mashego came on for Martin in a tactical switch.
The change of shape gave City the equaliser five minutes later as Fagrie Lakay smashed home an unstoppable low drive across, into the bottom corner after a through ball by Bradley Ralani.
Lyle Lakay had the chance to snatch the winner for the Brazilians in stoppage time with a free-kick on the edge of the box but he curled his effort just over the bar and extra-time was required.
The Citizens had to play the second stanza of extra-time with ten men after Nathan Fasika got a second booking for a foul on Sphelele Mkhulise in the beginning of the second period of extra-time.
City had a scare in the dying minutes after Taariq Fielies got injured and they had already made all their substitutions but the tough defender soldiered on, as they held on for penalty shoot-outs.
In a dramatic shoot-out, Onyango was the hero, as he saved no less than five penalties, including in the sudden death, as Peter Shalulile scored the decisive spot-kick and the Ugandan saved Mkhize's last kick to hand Sundowns the title.
City: Hugo, Mkhize, Fasika, Fielies, Dove, Mokeke, Nodada, Mdantsane, Ralani, Martin, Lakay.
Subs: Mpandle, Mashego, Cupido, Makola, Morris, Ajagun, Mokhouane, Roberts, Mayo
Sundowns: D.Onyango, Coetzee, Lebusa, Mudau, Lakay, Morena, G.Kekana, Jali, Kutumela, Zwane, Shalulile.
Subs: Mweene, De Reuck, Modiba, Domingo, Mkhulise, Erasmus, Maema, Vilakazi, Safranko