Replacement fullback Dan Biggar kicked a late penalty as Wales claimed a first success in 14 games over nemesis Australia with an error-strewn 9-6 victory at Millennium Stadium.
Saturday's win will be a boost to their confidence ahead of next year’s Rugby World Cup in Japan.
Australia lock Ned Hanigan was penalised for not rolling away after making a tackle and Biggar kicked Wales to a famous win following a contest that saw both sides commit numerous unforced errors and show a lack of cutting edge.
Wales’s Leigh Halfpenny, usually so deadly, landed two penalties but also missed two very kickable three-pointers, the second from directly in front of the posts on a nervous night in Cardiff.
It was by no means a classic, but for Wales coach Warren Gatland it was a seventh victory in a row and potentially a pivotal moment in his build-up to the global showpiece in Japan next year when the sides will meet again in the first-round pool stage.
The defeat compounded Australia’s dismal season with Michael Cheika’s side having won only three of their 11 tests.
Saturday's result represented their first defeat against Wales in a decade.
Gatland had spoken in the build-up about making sure his side closed out games from winning positions and while Australia were to a certain extent the architects of their own downfall with sloppy play, he will be pleased with the way his team managed the final five minutes.
Both teams struggled at set-pieces in the first half, Wales with their line-outs and Australia at the scrum, and they went into the break level at 3-3.
The home side should have been in front but Halfpenny, to everyone's amazement including his own, sliced a short-range kick from in front of the posts wide.
Australia started the second period with more front-foot ball and they managed to quicken up the breakdowns, but they turned down two chances to kick penalties in favour of attacking line-outs.
From the first they knocked on at the resulting maul and in the second instance botched their line-out and lost possession.
Halfpenny put the home side in front with 13 minutes remaining after Australia were penalised for offside, but the visitors hit back with a penalty from the touchline by replacement flyhalf Matt Toomua that looked set to steal a draw.
Wales had the last say, though, as they put pressure on Australia just outside the visitors’ 22, leading to Hanigan’s indiscretion and Biggar’s winning penalty three minutes from the end.