After scoring an unbeaten century against Germany in their final pool game at the tournament in Benoni, South Africa, Patrick Matautaava was again named man of the match for top scoring with 83 and taking two Italian wickets.
Italy lost the toss and were put into bat at Willowmoore Park but could only muster 183 runs before being dismissed in the 47th over.
In reply, Vanuatu chased down their target with 91 balls to spare.
Coach Shane Deitz said Vanuatu reverted to their flamboyant, Pacific style following losses to Jersey and Ghana in pool play.