The victory ensures Australia stay at the top of the World Test Championship standings with 100 per cent points, while England slip further.
Already on the brink of humiliation after a sensational bowling performance from Mitchell Starc and Boland on Day 2, England needed a big performance from two of their best batters -- skipper Joe Root and all-rounder Ben Stokes. A couple of flourishes and delectable drives from the duo would have given them a semblance of hope. But once the Australian bowlers found their rhythm again, the procession began.
Starc got through the gates of Stokes with an absolute beauty. The all-rounder had no answers as the ball nipped back in, shattering his stumps, as he departed for 11.
The Boland show then began as he embarked on a devastating spell that completely shattered the opposition. In the span of his three overs, he picked up four wickets. First, he trapped Jonny Bairstow in front of the stumps who then reviewed the call unsuccessfully.
Then, the big wicket of Root followed with a fuller delivery, which nipped away from the England skipper. Root could only edge the delivery, departing for 28.
Mark Wood was the next one to follow, with Boland taking a sensational caught and bowled. The crowd was up on its feet as Australia were now only two wickets away from a 3-0 victory in the five-Test series.
Ollie Robinson was the next one to perish against Boland, as the pacer again got the delivery to move off the deck. It proved too good for Robinson, who was dismissed for a duck. By the end, Boland's figures read 6/7 in four overs.
The final scalp was taken by Cameron Green, bowling Anderson for two as the MCG erupted with a big roar. England were bowled out for 68, losing the match by an innings and 14 runs.
Australia have now taken an unassailable 3-0 lead, with the Ashes in the bag. The fourth Test is scheduled at the Sydney Cricket Ground from January 5.
Brief scores: England 185 and 68 all out in 27.4 overs (Mitchell Starc 3/29, Scott Boland 6/7) lost to Australia 267 (Marcus Harris 76, David Warner 38) by an innings and 14 runs.