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Angelique Kerber secured a dramatic upset over world number one Serena Williams winning 6-4, 3-6, 6-4 in 2 hours and 8 minutes.
Number seven seeded Kerber, who was playing in her first major final, became the first German to win a Grand Slam title since Steffi Graf’s triumph at Wimbledon in 1999.
A shocked Kerber cried tears of joy as she celebrated the win on Rod Laver Arena.
She put an end to Serena Williams’s unbeaten streak in finals at Melbourne Park, and stopped the American from equalling Graf’s record of 22 major titles for now.
On Monday Kerber rises to a career-best position of world number two.
Later on Saturday Jamie Murray and Bruno Soares won their first ever men double’s title, edging Daniel Nestor and Radek Stepanek 2-6, 6-4, 7-5 in two hours and 19 minutes.
On Sunday, Jamie’s older brother Andy Murray will attempt to win his maiden Australian Open crown when his takes on world number one Novak Djokovic in the men’s singles final.
Earlier, Oliver Anderson continued the recent tradition of local success in the Australian Open junior boys' championship after running away with a 6-2, 1-6, 6-1 win over Uzbekistan's Jurabeck Karimov.
Despite dropping a set in the tough match, Anderson says he managed to pick up his game to take it home.
The 17-year-old Queenslander becomes the fifth Aussie in the past 10 years to win the title, joining Nick Kyrgios (2013 winner), Luke Saville (2012), Bernard Tomic (2008) and Brydan Klein (2007) on the honour roll.
Belarusian Vera Lapko also etched her name on to the girls' singles trophy after an inspiring 6-3, 6-4 victory over defending champion Tereza Mihalikova from Slovakia.
In the boys doubles, Sydneysider Alex De Minaur and Queenslander Blake Ellis took the title.
The pair came from behind to upset Lukas Klein of Slovakia and Czech Patrik Rikl 3-6, 7-5, 12-10.