Angelique Kerber stunned Serena Williams to win the Australian Open on Saturday and thwart the American world number one's bid to equal Steffi Graf's Open-era record of 22 Grand Slam titles.

In a huge upset, the seventh seed toppled the top seed 6-4, 3-6, 6-4 to win her maiden major title and become the first German Grand Slam champion since Graf at the 1999 French Open.

Williams, the world number one, had won all six previous Melbourne Park finals she had played and had also triumphed in her last eight Grand Slam deciders.  

But Kerber, inspired by a message from Graf, made clear before the match that all the pressure was on her opponent and she mercilessly exploited her weaknesses in a thriller at Rod Laver Arena.

"My whole life I was working really hard and now I'm here and I can say I'm a Grand Slam champion, so it sounds really crazy," she said, choking back tears.

"The best two weeks of my life and career. I had goose bumps here on the centre court when I was playing."

The left-handed German has had an emphasis on consistency in Melbourne, patiently building control of the point as rallies develop.

It worked well with the 28-year-old dropping just one set en route to the final, in the opening round to Misaki Doi -- where she also fended off a match point. 

Williams had been in imperious form all tournament, but too many errors cost her dearly against an opponent she had beaten five times before.

Three-set thriller

The German faced the powerful Williams serve first up, and failed to win a point against it.

Kerber appeared nervous and sent down a double fault, but steadied herself and a forehand long from Williams allowed her to hold.

She soon began finding her range and against the odds broke the American to go 2-1 in front when the top seed whipped an easy backhand out.

An errant Williams was hitting too many errors and Kerber held serve comfortably to apply more pressure.

Down 0-30 on her serve in the next game, Williams began screaming "C'mon' to pump herself up. A delicate drop shot and a lightning serve allowed her to hold for 2-3.

It seemed to temporarily flip a switch in the American who broke back, smashing a powerful forehand down the line to haul herself level.

But the errors kept coming from Williams, who swiped a wild backhand and then missed an easy volley to hand Kerber another break as the German dictated the baseline points.

Too many routine shots were being sprayed wide and long, with Kerber happily taking easy points to go 3-5 in front.

Williams managed to hold serve to stay in touch but 23 unforced errors to the German's three told the story of the first set, which Kerber wrapped up in 39 minutes -- the first set the world number one had dropped all tournament.

Rattled, Williams began cleaning up her act to hold serve in the first game of the second set. 

It went with serve until the fourth game when Kerber dug herself a hole with two double faults that helped Williams to a 3-1 lead.

The world number one fired her first ace of the match in going 4-1 in front and, more controlled, began shooting down some damaging groundstrokes.

Williams took the match into a deciding third set having made only five unforced errors, in stark contrast to her wayward first set.

But it was Kerber who grabbed a decisive break in the third set as she reeled off a brilliant passing shot on her way to a 2-0 lead.

It was just a temporary moment of jubilation as Williams quickly broke back.

The finely poised match went with serve until a titanic sixth game. Williams saved four break points but couldn't save the fifth as she looped a forehand long.

It spelled the end of the road for the American as Kerber held her nerve to win her first Grand Slam when Williams put another volley long.