irbsevens.com and James Mortimer 30.Nov.2013Getty Images
Sharni William's side were behind for most of the final but managed to claw their way back, and ran out eventual winners 35-27.
Both sides impressed over the two days in Dubai and the scene was set for an enthralling final under lights on the main pitch. While New Zealand were well ahead in the first half, with the likes of Kayla McAllister and Carla Hohepa getting on the scoreboard, Australia's fitness and conditioning shone through.
"It's not a fluke, the girls have worked really hard on their core skills," said Australian coach Tim Walsh.
"We've been progressing the whole way through pre-season. But every team is going to up their game going into the next round of the series, and we just gotta keep working."
Australian captain Sharni Williams was equally delighted with the effort shown by her troops.
"We had a little bit in the tank at the end of the game. We were missing a lot of tackles but when we got our hands on the ball we felt strong and we attacked.
"Our conditioning has definitely paid off."
Earlier in the day, England beat a plucky Spain side to win the Plate final and Fiji overcame France to win the Bowl.
In the cup semi-finals, New Zealand edged out Canada in the first semi, while Australia made easy work of Russia with a scintillating display of pace and power.
Under the searing midday heat, the quarter finals also produced some thrilling Rugby with Canada and Spain going to extra time and Australia beating England with the last play of the match.
"It's been amazing to see just how competitive the Women's Game has become," said IRB Head of Competitions and Performance Mark Egan.
"The skill sets of teams like Brazil and Spain has improved dramatically, especially in the last year."
"Fans here in Dubai were treated to great Rugby, and the final was a classic. My congratulations go to Australia, and we're all looking forward to the next leg in Atlanta in February."
IRB Women's Sevens World Series 2013/14: Dates and Venues:
First leg: Dubai, United Arab Emirates - November 28-29, 2013
Second leg: Atlanta, Georgia, USA - February 15-16, 2014
Third leg: Arena Barueri, São Paulo, Brazil - February 21-22, 2014
Fourth leg: Guangzhou University Town Stadium, Guangzhou, China - April 4-6 2014
Fifth leg: National Rugby Centrum, Amsterdam, Netherlands - May 16-17, 2014