The new Olympic Channel brings you news, highlights, exclusive behind the scenes, live events and original programming, 24 hours a day, 365 days per year.
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.
"We’re pretty gutted,” said New Zealand captain Sara Goss. “We came out here to win a gold medal and we are bringing back a silver. But silver's still good in New Zealand's eyes and we hope we have done them proud.”
New Zealand’s hopes suffered a major setback when Woodman, the tournament’s top try scorer with 10, was sent to the sin-bin for a deliberate knock-on.
After a tight and physical start to the final, McAlister forced her way over in the corner for her sixth try of the tournament to give New Zealand an early lead before Tonegato hit back with her seventh.
Australia had started to find holes in the New Zealand defence and when Woodman was sent off for two minutes, first Pelite then Green benefited from the extra space to give the women in green and gold a 17-5 lead just after half-time.
Charlotte Caslick then nipped over for another converted try to further extend Australia's lead and although McAlister grabbed her second try, two converted scores for New Zealand in little more than a minute was always going to be a big ask.
Woodman did finally weave her way over to score under the posts but the hooter had sounded and Australia were already well into their celebrations when Tyla Nathan-Wong took the conversion.
Australia coach Tim Walsh said he thought the inaugural women's tournament had shown the sport deserved its place at the Games.
"We certainly up held the values of the Olympic Movement, and rugby,” said Walsh. “I think we have created a very sustainable future for rugby sevens at the Olympic Games.”