A determined Caroline Wozniacki held firm to shake off a tenacious challenge from Simona Halep, edging a classic Australian Open final 7-6(2) 3-6 6-4 to claim her first grand slam title on Saturday.

After a captivating tussle played out in stifling humidity at a floodlit Rod Laver Arena, the Dane stood firm in a see-saw final set to claim the thriller when Halep wavered on serve.

"It's not easy to talk now but first of all I want to congratulate Caroline, she played amazing.... It's been a great tournament to me. Of course I'm sad I couldn't win today but Caroline was better than me," Halep told the crowd during the presentation ceremony.

The result ensured Wozniacki swiped Halep's world number one ranking, six years after losing it at the 2012 Australian Open.

After taking the win when Halep netted on the final point, an overwhelmed Wozniacki threw her racket away and collapsed onto the blue hardcourt.

Both players battled leg complaints in the taxing two hour and 49 minute tussle, but Wozniacki found the grit to make the breakthrough in her third grand slam final.

Halep was gallant in defeat but leaves Melbourne Park with a third grand slam final defeat.