Paceman Stuart Clark claimed 5-10 from 13.5 overs and former Test leg-spinner Stuart MacGill took four wickets to skittle the Victorians, during a sensational collapse of 9-34 after lunch on Thursday.
Needing 180 to make NSW bat again, Victoria lost opener Matthew Elliott (12) before lunch, but the innings lasted just 36.5 overs.
Only four batsman reached double figures, with Graeme Rummans top-scoring with 22.
MacGill took 4-41 in the second innings to give him eight wickets for the match.
In Melbourne (day three): Victoria 235 (J. Moss 114, M. Elliott 58; S. MacGill 4-103, M. Nicholson 3-47) and 91 (G. Rummans 22; S. Clark 5-10, S. MacGill 4-41) lost to New South Wales 414 for 7 declared (B. Haddin 154, S. Katich 78, J. Krejza 63; C. White 4-105) by an innings and 88 runs.