Sabalenka had been a hot favourite to become the first woman since Martina Hingis in 1999 to complete an Open title hat-trick at Melbourne Park.
Instead 29-year-old Keys became the oldest first-time grand slam champion in a decade with a roller-coaster 6-3 2-6 7-5 victory at Rod Laver Arena on Saturday night.
A precocious junior talent who arrived on the professional scene as a 14-year-old, Keys had been earmarked as a future superstar.
Until now, though, the American had never delivered on her immense potential.
Set to return an equal career-high No.7 in the world following her overdue breakthrough, Keys is the oldest woman to land their maiden major since 33-year-old Flavia Pennetta famously denied Serena Williams a calendar-year grand slam at the 2015 US Open.
The emotion-charged, watershed win atoned for Keys' despairing US Open semi-final loss to Sabelenka in 2023 after she'd won the opening set 6-0 and then served for the match.
But while Keys rejoiced, Sabalenka earned an unwanted place in tennis history as only the third women's world No.1 in the 57-year era of professional tennis to lose a grand slam final to an opponent ranked outside the top 10.
Sabalenka made an anxious start, coughing up two double-faults in the opening game to gift Keys the first break.
A nervous wreck in her only previous grand slam final, which ended in a crushing 6-3 6-0 loss to Sloane Stephens at the 2017 US Open, Keys played without fear on this occasion.
She gained a second break after another error-riddled fifth game from Sabalenka before holding serve for a 5-1 lead.
Keys, showing the strain for the first time, faltered serving for the opening set at 5-2, hitting a pair of wild forehand and backhands to offer Sabalenka an opening.
But the Belarusian couldn't take it, double-faulting for a fourth return to present Keys with set point before the world No.14 clinched it with a booming backhand-down-the-line winner.
Both players entered the final unbeaten in 2025 after Sabalenka opened the year with victory at the season-opening Brisbane International before Keys reigned in Adelaide.Something had to give, and it was Sabalenka who failed to handle the pressure under Melbourne's bright lights.
The 26-year-old had two break-point opportunities in the opening game of the second set, only to misfire again.
The top seed finally began to turn the tide after holding for 1-1, then upping the ante to break Keys twice to forge ahead 5-1.
The title match was back on level terms when Sabalenka served out the second set after one hour and 20 minutes of daring first-strike tennis.
The third set was a thriller, full of tension as neither combatant gave an inch until Keys snared a decisive break in the 12th game to seal victory after two hours and two minutes.
Keys saved match points in the semi-final against world No.2 Iga Swiatek and claimedtook the trophy with a run of five straight wins over seeds.
She also defeated world No.10 Danielle Collins, sixth seed Elena Rybakina and 28th seed Elina Svitolina.
