Town lost for the fourth time in four attempts as Elliot Whitehouse’s 16th minute close-range strike was enough to bring victory for the League Two side, who sit 27 league places below Shrews in the pyramid.
With a crowd of 41,000 split mostly Lincoln’s way, Paul Hurst’s Salop were unable to fashion an equaliser despite 10 or 15 minutes of threatening spells in each half.
For Lincoln it was Wembley joy at the first attempt.
Danny Cowley’s side imposed their physical game plan perfectly on Shrewsbury, who could not recover from the early setback.
Many may have seen the Trophy final, which Hurst won against Town with Rotherham in 1996, as a potential dress rehearsal for a League One play-off final later in the season.
It is true that third-placed Shrewsbury have bigger fish to fry in League One, but the latest Wembley defeat will hurt the players, staff and fans alike.
While enjoying themselves in the rain on Wembley Way ahead of kick-off after packed train and coach journeys down from Shropshire, Town fans cautiously had the pain of 1996, 2007 and 2009 at the back of their minds.
Memories of Rotherham, Bristol Rovers and Gillingham have made Wembley a tough place to stomach for Town.
No Payne no game
As Hurst’s men hoped to make it fourth time lucky, the 12,000 travelling Salopians - well outnumbered by more than 26,000 Imps from Lincoln - received a pre-match boost in the form of Toto Nsiala.
The big defender broke his cheekbone nine days ago at Rochdale but recovered in time for a battle at the national stadium. The Congolese was sporting a white mask.
Other team news of Town interest came in the shape of winger Nathan Thomas.
The Sheffield United loanee was included on the left side of Shrews’ midfield instead of Alex Rodman, who has been struggling with back problems. Rodman returned to the bench.
Carlton Morris, who headed Salop into the final with his goal against Yeovil, was included in the lone striker role with Payne on the bench.
Cowley’s Lincoln team almost picked itself, although four January signings were cup tied.
The Imps had no Wembley history to call on. No victories, no defeats. No euphoria, no heartbreak. For the droves of Imps fans it was their first time and they were making the most of it.
Hurst’s side showed the class in the 27 league positions - and one division - that separates the sides.
Omar Beckles went on a trademark silky run from the left corner of the Imps' box, jinked past two challenges to the byline and his goalbound strike from a tight angle deflected behind.
From a half-cleared corner, midfielder Bryn Morris - in for the injured captain Abu Ogogo - spanked a delightful left-footed half-volley that clipped Ryan Allsop’s crossbar on the way over.
The opening 10 minutes had boosted Town’s following and quietened down the travelling Imps. But, to their credit, with the powerful and sizeable centre-forward Matt Rhead the target of their attacks.
A deep free-kick was hoisted his way and, rather than attack the ball, Rhead ended up colliding with Dean Henderson in the Shrews goal. Henderson was down for a lengthy period and it was a sign of things to come.
Replays did little to shine light on the big Lincoln man, who appeared to have intentionally led with his arm on Town’s goalkeeper.
A Sam Habergham corner found skipper Luke Waterfall ahead of Mat Sadler and the close-range volley was parried by Henderson, but straight out to Whitehouse who converted into the top corner.
The away end was bouncing.
All the emphasis stayed with the League Two side as Henderson was forced to race to the edge of his box to clear well.
Shrewsbury showed some life as Shaun Whalley and former Imps man Jon Nolan - who was feeling the full force of Lincoln boos - combined for Whalley to flash just wide from outside the box.
But City were handling themselves well and broke through the lively top scorer Matt Green, who crossed for Whitehouse, but Henderson this time punched the goalbound header.
Hurst’s men, third in League One, rallied on half hour and were unfortunate not to draw level. Whalley’s corner looked perfect for Beckles but his bullet header was outstandingly parried away by Allsop.
Nsiala swung and missed at the rebound before James Bolton again found the woodwork for Town from a time angle.
Challenges were flying in left, right and centre. Nolan was involved in plenty of work as Lincoln chased his shadow and flew into every tackle - Town tried to give as much back as they could in the physical department.
They forged another opening just before the end of an even first period. A half-cleared corner awkwardly bounced the way of Carlton Morris inside the Imps box. Morris had to acrobatically execute a volley but blazed it comfortably over.
The half-time break did nothing to calm the physical, competitive clash. Both sides surged into challenges with Town, through Nolan and Whalley, looking to create on the edge of the Imps’ box.
Shrewsbury were quicker and sharper with the ball as they rejuvenated the away fans they were attacking towards.
They peppered crosses into the Lincoln box.
City stood firm and cleared but the crosses kept coming. Bryn Morris’ fine goalbound strike from outside the box was cleared almost on the line by a crucial defensive block.
Whalley’s low angled strike was then blocked at Allsop’s near post.
Panto villain Rhead could have sealed it on the hour mark. Town did not deal with a first cross, which was pulled back only for the forward to help over the top while unmarked from 12 yards out.
Hurst’s first roll of the substitute dice was to send on Rodman for the heavily involved Bryn Morris.
Rodman went on the left flank, opposite Whalley, with Thomas playing infield behind Carlton Morris.
Payne was then sent on as Shrews went two up front. Ben Godfrey’s strike might have hit a hand in the Imps box but Town’s momentum from early in the second period had petered out. The impressive Whitehouse sent an acrobatic effort over Henderson’s goal.
Rodman’s fine run was ended cynically and presented his side with a handy looking free-kick which Whalley could only send into the wall as Town looked unable to find the final ball to carve open a resolute Imps backline.
The joyless national stadium run went on and it was jubilant red and white scenes at full-time.
Town could not create enough in the second period to drag themselves back into it and Imps fans celebrated as the Town faithful headed to the exit.
Lincoln City (4-3-3):
Allsop; Eardley, Waterfall ©, Bostwick; Woodyard, Frecklington, Whitehouse; Green (Long, 90+5), Rhead (Palmer, 62), Rowe (Anderson, 64).
Subs not used: Farman (gk), Chapman, Stewart, O’Hare.
Shrewsbury Town (4-1-4-1):
Henderson; Bolton, Nsiala, Sadler, Beckles; Godfrey; Whalley (Gnahoua, 85), Nolan, B Morris (Rodman, 67), Thomas (Payne, 70); C Morris.
Subs not used: MacGillivray (gk), Lowe, John-Lewis, Eisa.
Referee: Gavin Ward