The world series champions went behind early in the match, however four unanswered tries from Emma Tonegato, Evania Pelite, Ellia Green and Charlotte Caslick then gave them a lead that New Zealand were unable to overhaul.
There were jubilant scenes at the final whistle, as the Australians huddled in tearful hugs under the posts. "It brings tears to my eyes," explained Green. "We've just made Australian history, rugby history. It means everything."
New Zealand, who scored two tries through the outstanding Kayla McAlister and one at the death from Portia Woodman, performed their traditional haka at the end of the match, but they could not hide their devastation at missing out on gold.