Wawrinka was a huge underdog having never won a set in 12 previous matches against Nadal, but he played superbly to break that sequence and was in control of the second when the world number one suffered a back injury.
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Remarkably Nadal managed to win the third set but Wawrinka eventually got his focus back in the fourth to clinch a 6-3 6-2 3-6 6-3 victory.
Stanislas Wawrinka won his first ever set against Rafael Nadal to take an early lead in the Australian Open final.
World number one Nadal had won all their previous 12 matches in straight sets but it was first-time grand slam finalist Wawrinka who clinched the opener 6-3.
The hope for the 28-year-old Swiss was that three of their last four sets had been decided by close tie-breaks, and he has never played better tennis than these two weeks.
He ended a 14-match losing run against three-time defending champion Novak Djokovic in the quarter-finals and finally believes he belongs at the top of the game.
Nadal had looked supreme in defeating Wawrinka's countryman Roger Federer on Friday but the soon-to-be Swiss number one has the power to match the world number one.
It had taken Federer until the third set to create break points but Wawrinka did so in only Nadal's second service game, and took the first with a fine forehand.
All the pressure was on Nadal, and he looked like he was feeling it, dropping the ball far too short and inviting attack from his opponent.
And Wawrinka was attacking at every opportunity, a superb backhand down the line showing Nadal that the high forehands that had so nullified Federer would not have the same effect.
Nadal had to fight off another break point to hold for 2-4, and he transferred some pressure onto his opponent by forcing him to serve it out.
Nadal sensed his moment and missed first serves cost Wawrinka as he dropped to 0-40.
But the Spaniard did not make another return and an ace from Wawrinka gave him the set.
It was a huge statement of intent from Wawrinka, and things got even better for the eighth seed at the start of the second set.
A searing return winner gave him a break to love, and a run of 12 straight points was eventually ended when he was 40-0 on serve.
The catalyst for Wawrinka's transformation from talented dangerman to grand slam challenger was his decision to hire Magnus Norman as coach last spring.
Swede Norman was the man behind the only player ever to beat Nadal at Roland Garros, Robin Soderling in 2009.
The match then took another twist in the third game when Nadal seemed to jar his back.
The Spaniard held his serve but headed off court at the change of ends to receive a lengthy medical time-out.
Wawrinka was furious that he was not being told what the injury was and entered into a heated debate with referee Wayne McKewen.
When Nadal came back on court he was loudly jeered by the Rod Laver Arena crowd, but the problem was all too apparent.
He was rolling in serves at less than 80mph and moving very stiffly on the baseline, while the emotion was clear to see as he struggled to hold back tears.
The crowd were back on Nadal's side as he saved three set points to hold for 2-5, but the Spaniard sat with head in hands at the changeover, sending the trainer away.
It was a mental test for Wawrinka, whose head must have been spinning, but four big serves gave him the set 6-2.
Nadal appeared to think about calling it a day at the end of the set but decided to head to his chair, and in the first game of the third set there seemed to be a glimmer of hope.
The top seed saved two break points and was at least able to hit a couple of winners.
Of all the things Wawrinka might have expected to happen in his first grand slam final, this surely was not one of them, and he was not handling the uncertainty very well.
Nadal opened up a 3-0 lead without doing much more than keeping the ball in the court, and more errors from Wawrinka on break points helped the Spaniard win one of the more remarkable sets of his career 6-3.
Wawrinka was battling himself more than his opponent, and two more break points went begging at the start of the fourth set, a set he desperately needed to win.
But the Swiss was handling events much better, holding his own serve easily, and he finally broke Nadal to lead 4-2.
Incredibly, he was then broken back to love, but Nadal's serve was still his big weakness and Wawrinka struck once more to move to within a game of victory.
This time he held his serve to love, raising his hands in delight and relief, although his muted celebrations reflected the strange circumstances of his maiden grand slam triumph.
Wawrinka becomes only the second man after Juan Martin del Potro to break the big four's stranglehold on slam titles since Marat Safin won the Australian Open in 2005.