Williams was hoping to secure the 22nd Grand Slam title of her distinguished career, a win which would have moved her level in the all-time stakes with Steffi Graf.
But Kerber, who sampled Slam glory for the first time in her career here, brought her best to the Rod Laver Arena in the biggest match of her life, becoming the first German since Graf to win a major title.
Here's a look at the winning moment, per the tournament's Twitter feed:
Although Williams was the big favourite to triumph in this showpiece, any notion that this was going to be a comfortable contest was dispelled early on by her determined opponent.
Indeed, while the top seed took the first game, Kerber was the superior player in the early exchanges and was able to snaffle an early break. Despite her haul of 21 Slam titles ahead of this showdown, as noted by Ben Rothenberg of the New York Times, it was the American who was looking the most edgy initially:
Soon, she was able to settle down, though, and having recovered from 0-30 with the score at 3-1 in the German’s favour, we were treated to Williams’ first “come on” of the contest.
Kerber showed her first signs of final nerves too, as a poor second serve on break point was smashed down the line from Williams, levelling it up at 3-3 again. But the German took advantage of a sloppy game from the top seed to break back again.
As Sports Illustrated's Jon Wertheim noted, the six-time champion was making a lot of uncharacteristic errors in the opening set:
The seventh seed expertly consolidated her advantage to move 5-3 up, and although Williams did respond to make her serve it out, Kerber showed few signs of stage fright in wrapping up the opening set 6-4.
As we can see here courtesy of ESPN Tennis, the first set is typically a decent barometer of how Williams will fare when it comes to Grand Slam finals:
It was little surprise to see that after some time to regroup, Williams was a lot more consistent at the beginning of the second stanza.
A brilliant opening service game seemed to calm the American down. In the fourth game, Kerber’s first real loose one of the match, she seized a vital break. That was after the German served two double faults and made a simple error to hand Williams three break points, the third of which she was able to convert.
As noted by the tournament’s Twitter feed, Williams’ unrivalled determination was starting to come to the fore:
A consolidation of the break gave the champion a 4-1 lead, and from there she was able to wrap up the second set 6-3, taking us into what looked poised to be a thrilling decider. The signs were ominous for Kerber, too, with Williams starting to look as though she was approaching her best.
Indeed, as these figures from former United States Davis Cup skipper Patrick McEnroe showed, the top seed was slowly moving through the gears in the match:
But Kerber wasn’t going to let her best chance of a Slam title slip away without a battle, and after smashing Williams around the court in her opening service game of the third stanza, she dug deep to grab a break and a 2-0 lead.
It would be enough to break the will of so many players, even those at the top of the game. However, as she’s proven so many times, Williams, who had never lost a third set in a Slam final, is a different animal, and her response was immediate, whipping a backhand across court to get the match back on serve.
As noted by BBC Tennis, Williams was wearing her heart on her sleeve as the final moved towards its climax:
Kerber held in the next game, before a sensational sixth game of the set played out, with both women giving absolutely everything in pursuit of the title.
It saw a desperate Williams save four break points, as the pair took part in some stunning rallies. But Kerber continued to battle and eventually took what looked to be a decisive break of serve, moving into a 4-2 lead in the decider.
After consolidating with a routine service game, the seventh seed moved to within one game of victory. But again, Williams showed her champion credentials, forcing her opponent to serve it out and then capitalising on the German's nerves, securing a break.
Kerber could have folded at this point. But she recomposed herself against the Williams serve and at 40-30 down won three points in a row to secure the title, capping off one of the all-time great finals.
The loss will be a massive disappointment to Williams, who would have been desperate to retain the title she lifted 12 months ago. After winning three of the four Slams last year, many anticipated the American would go all the way in all four in 2016, starting with a victory Down Under. However, the quest for a clean sweep will now have to wait another year.
Kerber deserves immense credit for her efforts, though. Williams has proven to be a force of nature in Slam finals, having lost just four of 25 ahead of this match.
Both players were in reflective mood after the clash, with Williams extremely gracious in defeat, per BBC Tennis:
Kerber expressed her shock at the triumph, conceding she couldn't quite believe she was a Grand Slam champion, per the tournament's official Twitter account: