Melbourne, Australia: Serena Williams rewrote history Saturday to surpass Steffi Graf and capture a record 23rd Grand Slam title as well as the world number one ranking by beating her sister Venus in the Australian Open final.

The dominant American swept past her greatest rival 6-4, 6-4 on Rod Laver Arena for her seventh Melbourne Park crown to finally clinch the record for Open-era major titles, nearly 18 years after winning her first at the 1999 US Open.

The 35-year-old, who equalled Graf's mark of 22 at Wimbledon last year, now stands just one behind the all-time 24 won by Margaret Court, who was in the president's box to witness her feat.

Her astonishing achievement also means she again becomes the world's number one player, ending the brief stay of Angelique Kerber who displaced Williams after three-and-a-half years on top in September last year.

Fittingly, her sister and closest confidante, Venus ,was on the other side of the net to share the moment, another chapter written in their amazing family history.

"I would really like to take this moment to congratulate Venus, she is an amazing person," said Serena. 

"There is no way I would be at 23 without her. There is no way I would be at one without her. 

"She is my inspiration, she is the only reason I am standing here today and the only reason that the Williams sisters exist."

It was Venus -- when still a teenager with beads in her hair -- who knocked Serena out in round two on her Grand Slam debut in Melbourne 19 years ago, and they have since played nine major finals together, living each other's highs and lows.

At 36 and seeded 13, Venus had turned back the clock to make her first Grand Slam title match since Wimbledon in 2009, but adding to her seven major successes was not to be.

"Serena Williams... That is my little sister guys. Congratulations Serena on number 23," said an emotional Venus.

"I have been right there with you, some of them I lost right there against you. Yes, that is weird but it is true. 

"But it has been an awesome thing, your win has always been my win, I think that you know that. Those times that I couldn't be there, didn't get there, you were there. I am enormously proud of you."

- Emotional embrace -

Showing the single-mindedness that has propelled her to greatness, a focused Serena, seeded two, overcame a scratchy and nervous start in which all four opening games were breaks and when she smashed a racquet in frustration.

But she soon settled to get a decisive break to go 4-3 in front with an unstoppable backhand, and served out the set with an ace.

Serena was fired up and after the first two games of the second set went to serve, she worked three break points in the third only for her sister to negotiate her way out of trouble with some big forehand winners.

The tense battle went with serve to 3-3 before Serena cranked up the pressure to break with a scintillating crosscourt backhand and take a 4-3 lead.

With history beckoning, she wasn't about to throw it away and she served out the match, falling to the floor in celebration before a long embrace with Venus to share the biggest moment of her career.

Despite the loss, being in the final was a big achievement for Venus, whose career went off the boil for several years after she was diagnosed with the energy-sapping Sjogren's syndrome in 2011.

In the three years afterwards, she failed to get past the third round at any Slam and her ranking plunged, with her career seemingly in permanent decline.

But she managed her schedule carefully and adopted a raw foods and vegan diet, making the semi-finals at Wimbledon last year before her run to the decider in Melbourne.