The Kangaroos had lifted the World Cup for the first time in 1987 and then thrice in a row from 1999, 2003 and 2007.
Skipper Michael Clarke (74 off 72 balls) and in-form batsman Steve Smith (56 not out) carried Australia to within 9 runs of the victory when Clarke played on Matt Henry and departed to a standing ovation by the record 93,000 crowd at Melbourne Cricket Ground.
Smith hit the winning boundary with Shane Watson backing him up. New Zealand had struck early, with Trent Boult removing opener Aaron Finch caught and bowled for a duck.
David Warner played an aggressive innings (45) before he fell to Matt Henry. . Clarke and Smith played some brilliant shots and also grafted along to take the Aussies to an emphatic victory.
Earlier, Australian bowlers put up an impressive performance to give themselves a strong chance as they skittled New Zealand out for a paltry score of 183 in 45 overs.