Both teams finished on 340, leaving New Zealand with a 2-1 lead in the series with one match to play.
England batted first and made 340 for six with four players scoring half-centuries. New Zealand lost seven wickets in their run chase with Jamie How top-scoring with a superb 139 and Brendon McCullum making 58.
How was run out off the penultimate ball of the match, leaving the Kiwis requiring two runs off the final ball to win. However, captain Daniel Vettori could only manage a single off Luke Wright's delivery, leaving the teams all square.
Phil Mustard (83) and Alastair Cook (69) had given England the perfect start by putting on 158 for the opening wicket before they were dismissed in successive balls by Jesse Ryder.
Kevin Pietersen and Collingwood continued the attack. Pietersen’s 50 came off 47 balls and Collingwood smashed six sixes to finish unbeaten on 54 from 30 deliveries.
Vettori, who had sent England into bat after winning the toss, captured two wickets but it was a day when bowlers were very expensive.
New Zealand are one of only two teams to have chased more than 340 runs to win a one-day international, achieving that feat against Australia a year ago.
How struck 10 fours and three sixes in his 139, the highest score by a New Zealander in a one-day international against England, while McCullum smacked six fours and a six to lay the foundations for an epic encounter.
Meanwhile, the England team was fined for maintaining a slow over-rate.
ICC Match Referee Alan Hurst imposed the fine after Collingwood’s side was ruled to be two overs short of its target.