Tamara Echegoyen-skippered Spain overcame Ekaterina Skudina's Russia in the semi-finals yesterday and went on to deny the Australian crew a fourth Sailing gold medal of the Games.
Australia twice recovered from going behind in the best-of-five series, but Echegoyen, Sofia Toro and Angela Pumariega went onto ensure Spain top the podium.
Things began well for the eventual gold medallists in Weymouth Bay, easily winning the first race ahead of Australia's Olivia Price, Lucinda Whitty and Nina Curtis.
The Australians responded well and impressively won the second race, before things went wrong in match three as Price fell out of the boat.
Australia took the lead and were making good progress on the first downwind leg when the skipper was swept out of the boat, forcing crew members Whitty and Curtis to swing around to collect her.
Spain went on to easily win the race but Australia responded strongly yet again, levelling things up at 2-2 as they took the fourth race by some distance.
However, Price and her crew eventually had be happy with silver after being forced to take a penalty turn in a tight final race, allowing Spain to go and win the first-to-three series.
'We are very, very happy,' Pumariega said.
'It was close racing and they have won very, very often in Weymouth so to win the gold medal is a dream.
'We thought it would be over all five races because Australia are a very strong team, but we knew we would win the gold medal.
'We of course surprised ourselves, though. We said before the Olympics we would try to pass the quarter-finals and as each race went very well we said 'why not go become Olympic champion?'. It is a dream.'
Earlier in the afternoon, Silja Lehtinen's Finland overcame Skudina's Russia to win bronze.