A bus driver, followed by the victim, ran after the suspected thief along Fishergate, before a passer-by intervened and "rugby tackled" the man to the ground in Winckley Street.
And China uniform as he struggled to break free, victim Linda Molloy, 57, grabbed his shirt and starting screaming at him to give the money back.
He shoved her away and she careered into a stationary car, injuring her head.
But her heroes managed to pin the man down until police arrived and the money was recovered from his shoe.
Grandmother-of-six Mrs Molloy has thanked the bus driver and a passing plumber for their quick actions.
The call centre worker said: "They were absolutely magnificent a I can't thank them enough for what they've done.
"Without them, the money would be gone."
Police believe Mrs Molloy, of Thistleton Road in Larches, Preston, had been watched as she withdrew cash from the Barclays bank in Fishergate after finishing work.
She was then followed by two men and a woman who surrounded her as she got on to the 88C orbital bus outside the nearby Alliance and Leicester at 3pm on Wednesday.
The bus driver saw a man dip his hand into Mrs Molloy's handbag and raised the alarm.
He chased the man along Winckley Street and, with the help of Mr Law, performed a citizens' arrest.
The mother-of-three said: "If it hadn't been for the bus driver, I wouldn't have even known about it until I got home.
"He was brilliant, he shot off the bus down Winckley Street and followed him with me following in hot pursuit.
"This other guy (Mr Law) jumped on top of him and wrestled him to the ground. I went for him myself, I just made a lunge.
"Everybody was trying to apprehend him and he kept getting away. I managed to get hold of his shirt and I was saying: 'Where's my money? Give me my money. I want it back'.
"He flung me over the road and I went with force on to the ground and banged my head on a car.
"My daughter said: 'Typical you mum, have-a-go-granny'. I'm a hardy person.
"I didn't cry a I was in that much shock a but Rolex Replica Watch when they said they had the money I just burst into tears."
During the struggle, Mrs Molloy, who was planning to lend the money to a family member, suffered scratches and bruises to her head.
She was checked over by paramedics but did not need to go to hospital and returned to work yesterday.
Mrs Molloy, who lives with her partner Roy Hardman, 54, also gave her "heart-felt thanks" to a woman passer-by who sat with her for almost an hour after the incident.
Police praised the men's actions and warned people to be vigilant when withdrawing money from banks and cashpoints.
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Det Sgt Steve Ryder from Preston CID said police had the money and would be returning it to the victim.
He said: "They did very well to detain him. We think the woman had been targeted within the bank.
"It's an isolated attack but the message needs to go out for people to be more vigilant in the banks and at cash machines as well. We'll be putting a message out to the banks."
A 21-year-old man from London has been charged with theft and assault.
Police are still looking for a male and a female accomplice and have released CCTV images.
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