England trailed 15-0 at one stage but a penalty from fly-half Owain James on the stroke of half time lifted their spirits and they were a transformed side after the break.
England ran in four tries in the second half but it was not until replacement scrum-half Alex Mitchell crossed seven minutes from time that England led for the first time.
Replacement centre Conor Dolan, who was called up from the England South squad at the BMW Wellington International Festival capped an industrious display with England's fourth try three minutes from time.
The win helped England avenge a 24-20 defeat by Italy Under 17s at Lichfield on Monday and marked the end of Stanlake's four year reign.
The former Cheltenham and Gloucestershire fly-half was previously assistant coach for nine years, and the match marked the end of an era with team manager David Maughan and chairman of selectors Ian Sharp also stepping down after their long involvement.
"It was a fantastic game of schoolboy rugby. Wales did dominate the first half there's no doubt about that, we made some slight adjustments at half time and talked about what we needed to do and we stuck to it," Stanlake said.
"As we said last night at the team meeting we would never give up. Their character shone through, they managed the game very well and everyone stepped up to the plate. You can't ask any more than that.
"We have always known that we have a 23-man squad and the game was always going to be about 23 players. The bench played an important role and we stressed all week that the eight replacements were going to make a difference."
An England win appeared unlikely when Wales centre Matthew Pearce powered over after just six minutes and full-back Jack Evans added the conversion which was followed by a penalty after 26 minutes.
Wales also capitalised when England lost centre Rotimi Segun to the sin-bin for killing the ball in a ruck as they worked an overlap for right wing Rhys Gealy to score an unconverted try.
But James's penalty gave England a glimmer of hope and lock Alex Munday continued England fightback when Wales fumbled in defence and England countered.
James reduced the deficit to four points when Wales were penalised for holding on in a ruck but Evans quickly cancelled out that score with his second penalty.
England equalised with an opportunist try from flanker Joe Mullis who picked out a stray throw from Wales replacement hooker Aldi Coverdale at a five metres line-out and nipped over for a try that James expertly improved.
A third penalty from Evans restored Wales' lead but only temporarily as the alert Mitchell tapped and ran a penalty in the visitors' 22 and he darted over for a solo try that James also converted.
Dolan rounded off an excellent display from England and himself when he cut through and James again added the extras to put the game beyond Wales.
A second try from Gealy in injury-time could not deny England their jubilant celebrations at the final whistle.
Stanlake was given the honour of presenting each England player with his shirt before the match and was mobbed by his young charges after he had delivered his final post-match address.
"The boys have done it for themselves, that's the most important thing," Stanlake said. "I shall reflect on this game in a week or so when we have had the opportunity to sit back and relax about it and reflect on what an achievement it was.
"It's been an emotional 24 hours and trying to keep those emotions in check has been difficult. But in training everyone's game head was on and when there was time to show emotion, emotion was shown.
"There's nothing wrong with that, everyone believes it is part of the passion of the game. Everyone knew what it meant to everybody, it's not just to me, but to the team and what they wanted to prove today.
"That's what they have done they have proved that they are a very, very god squad."
England Under 16s:
15 Matt Gallagher (Colfe's School, Old Colfeians and Kent)
14 Dominic Morris (New Hall School and Essex)
13 Rotimi Segun (Northampton School for Boys, Old Northamptonians and East Midlands)
12 Sam Allan (Crossley Heath School and Yorkshire)
11 Favour Maduka ((Stonyhurst College and Lancashire)
10 Owain James (Harrow School and Middlesex)
9 Jack Maunder (Blundells School and Devon)
1 Mofe Wilkey (Trinity School and Surrey)
2 Freddie Davison (Bedford School, Bedford Junior Blues and East Midlands)
3 Jack Stanley (Helston College, Penzance RFC and Cornwall)
4 Harry Wilson (Kingshill School, Cirencester RFC and Gloucestershire)
5 Alex Munday (Berkhamsted School, Harpenden RFC and Hertfordshire)
6 Nick Harris (Sherborne School and Dorset & Wilts - captain)
7 Joe Mullis (Chosen Hill School, Chosen Hill RFC and Gloucestershire)
8 Callum Chick (Ponteland HS, Ponteland RFC and Northumberland)
Replacements (all used):
16 Garth Spencer (Biddenham Upper School, Bedford Junior Blues and East Midlands)
17 Henry Peck (Vandyke School, Leighton Buzzard RFC and East Midlands)
18 Billy Walker (Great Baddow HS, Chelmsford RFC and Essex)
19 Archie White (Glyn School and Surrey)
20 Victor Keunen (Stonyhurst College, Harlequins and Lancashire)
21 Alex Mitchell (Lymm HS, Lymm RFC and Cheshire)
22 Paddy McDuell (Bedford School, Bedford Junior Blues and East Midlands)
23 Conor Dolan (St Benedict's Ealing, Richmond RFC and Middlesex)
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