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Injuries during the tournament to Dan Carter and Colin Slade saw Donald recruited into the 30-man squad and he began the final on the bench with Aaron Cruden in the number ten jersey.
But when Cruden pulled up injured late in the first-half Donald's fairytale rise into the World Cup was complete. The former Waikato fly-half made an immediate impact with a long-range penalty to add to an earlier Tony Woodcock try for the All Blacks.
France hit straight back after Donald's penalty with a try from Toulouse's Thierry Dusautoir which was converted by Francois Trinh-Duc.
The extras brought the scores to within a point by Richie McCaw's side hung on to claim a second title on home soil.
