Substitute Lewis Fairbairn gave Alnwick the lead in the second half after a goalless first 45, but Wallington hit back with two goals of their own to win 2-1.
It was Alnwick’s first final appearance in 12 years and they were looking to lift the trophy for a third time.
But their opponents, who had lost to Killingworth on penalties in the final of the Challenge Cup just three days earlier, finally got their hands on some silverware with a hard fought victory.
On Monday, Alnwick returned to action with an away game against Gateshead Rutherford in the Premier League.
However, they were unable to bounce back from their final loss and went down to a 2-0 defeat on south Tyneside.
The result means Alnwick currently sit ninth in the Premier Division table on 32 points from 213 games played.
In what is a busy week for the St James’ Park outfit, last night (Wednesday) they were due to take on 12th placed Percy Main Amateurs at home and this weekend they have a further two games over Easter.- home to Haltwhistle Jubilee on Good Friday and away to Cullercoats on Monday.
In Division 3, Alnwick Development lost 3-1 at home to Newcastle Independent Cabrito. The Alnwick goal was scored by George Henley.
The defeat leaves the Development side eighth in the table on 34 points and on Saturday (April 16) they are home to Whickham U23s.
North Sunderland were without a fixture at the weekend after their game with Whitley Bay SC was called off.
Last night (Wednesday) they were home to title-chasing Walker Central and on Saturday they are home to Newcastle University A.
In Division 1, Rothbury (who are currently eighth in the table) had no game on Saturday and were due to play away to Forest Hall Celtic last night (Wednesday). Their next scheduled fixture is not due until Saturday, April 23, at home against Wallsend Boys Club.