It was an enthralling climax to the second day of competition which also saw South Africa win bronze, Samoa win the Plate and Papua New Guinea deservedly collect some silverware, defeating Canada 17-10 in the Bowl final.
Following a climatic end to the first day with Kenya beating Samoa, there were a further 18 matches for the crowd at the Delhi University stadium to savor, ending with New Zealand's historical victory over Australia.
Trailing 17-7 in the second half following tries from Wallaby Lachie Turner, Luke Morahan and James Stannard, it seemed as though New Zealand would suffer their first ever defeat in the history of the Commonwealth Games.
But tries from DJ Forbes, replacement Sherwin Stowers and Kurt Baker ensured Gordon Tietjens' side went home with the gold medal in front of a packed crowd at the Delhi University stadium.
Lote Raikabula had given the defending gold medallists a 7-0 lead but withouth the injured Tomasi Cama they seemed unable to unlock the Australian defence.
The three Australian tries followed either side of half time including a sensational individual effort from Morahan but when flyer Stowers came on as a second half replacement he had an immediate impact against some tired legs.
Australia's silver medal is their first since 1998 and although they will be disappointed, the medal caps a successful year, with Michael O'Connor's side winning their first leg on the World Series since 2002 at the 2010 London Sevens.
Final word from IRB CEO/Secretary General, Mike Miller, on Twitter in Delhi (@irbmikemiller): "Congratulations to New Zealand for winning a fourth-successive Commonwealth Games Rugby Sevens Gold. Heartbreak for the young Australians, but they go home with a first ever Commonwealth Games Rugby Sevens silver."
In the bronze medal match, South Africa dramatically claimed their first medal since 2002, beating England 17-14 having trailed 14-5 at half time.
Bernard Botha scored the opening try of the match but converted tries from Matthew Turner and Dan Caprice gave the 2006 silver medallists the lead going into the interval of the penultimate match in the competition.
Cecil Afrika and Lubabalo Mtembu clinched the title in a nervy second half, however, as Paul Treu's men held firm to deny the efforts of the spirited Ben Gollings at the death to claim a historic bronze medal.
Medal competition lights up Comm Games
New Zealand became the first side to reach the gold medal final, beating England 33-12 in a repeat of the 2006 gold medal match, when New Zealand were 29-21 victors.
Forbes (two) and Cama got the defending gold medallists off to a flying start before Isoa Damudamu hit back for England. But Raikabula and Cama cemented the victory for Tietjens' men.
The second semi final between Australia and South Africa was a closer affair and although Ryno Benjamin put Treu's men on the front foot after two minutes, urner, Liam Gill and the influential Stannard ensured O'Connor's side were guaranteed their first medal since 1998.
New Zealand had earlier beaten RWC Sevens 2009 winners Wales 33-10 in the quarter finals despite conceding the opening try to Ifan Evans, with Baker (two), Ben Smith, Hosea Gear and Toby Arnold securing victory.
England set up a repeat of the 2006 final after a hard-fought victory over Samoa, a side they lost 15-12 to in one of the most dramatic matches of this year's World Series in Edinburgh, edging a tough encounter 7-5.
Alatasi Tupou gave Stephen Betham's men a 5-0 lead after a period of possession and territory on the England try line before Greg Barden drew the scores level and Ben Gollings added the conversion to give England a crucial two-point lead in a very tight affair. It is the second successive time England have beaten Samoa at this stage of the competition, having won 17-14 in Melbourne.
Kenya caused the biggest upset in the final pool match of the opening day, beating Samoa 12-10, but Australia proved a step to far in the quarter finals, with the 2010 London Sevens champions reaching the semi finals with a 27-5 victory thanks to two tries from Stannard.
South Africa and Scotland completed the quarter final line-up, and it was Treu's side who reached the semi finals with a 10-7 victory thanks to a decisive try from Benjamin. Scotland had scored one of the tries of the tournament through Mike Adamson with the last play of the opening half, but their hearts were broken early in the second.
Samoa too strong for Scotland in Plate final
Samoa scored six tries as the reigning World Series champions put the disappointment of missing out on a medal behind them, beating Scotland 34-0 in the final.
Afa Aiono and IRB Sevens Player of the Year Mikaele Pesamino both scored two tries against a Scotland side who will have done head coach Stephen Gemmell proud in his final Sevens hurrah.
Earlier the two teams had reached the final after respective 38-12 and 22-17 victories over Wales and Kenya, following their losses in the medal quarter finals.
The eventual winners avenged a Plate semi final loss to Wales in 2006 as Stephen Betham's men crossed for six tries against the current RWC Sevens holders, whilst Scotland beat Kenya dramatically in sudden death extra time with Lee Jones the hero.
Having earlier lost 27-5 to Australia in the medal quarter final, Kenya were unable to build on their 100% record and dramatic victory over Samoa on day one.
Papua New Guinea beat Canada in Bowl final
Papua New Guinea recorded a memorable victory over World Series regulars Canada to win the Bowl final 17-10 at the 2010 Commonwealth Games thanks to two tries from Albert Levi.
It was just reward for PNG who entertained the crowd at the Delhi University stadium with some exhilarating Sevens throughout the tournament, scoring three tries against reigning World Series champions Samoa and narrowly missing out on a huge upset with a 17-12 defeat to Pool C winners Kenya on day one.
Earlier Canada and PNG had come through two thrilling semi finals with Geraint John's side beating Uganda 22-17 despite trailing 12-5 at half time and the eventual winners proving too strong for Tonga, winning 24-5.
Henry Liliket gave a Sevens master class in the opening half, showing great strength and speed to score the first two tries before turning provider for PNG's third through Shadrach Ghabiliha, with 18-year-old Eugene Tokavai sealing the victory.
In the first semi final Uganda had opened up a 12-0 lead after Lawerence Wakabi, picking up where he left off earlier in the day, and Ambrose Kamanyire scored the opening two tries of the match, but Canada hit back with the next four tries.
Nathan Hirayama and Conor Trainor both scored twice - the former taking his tournament tally to seven - and although Kamanyire scored his second of the match, Canada held on to reach the final.
The two bottom placed teams from each of the four pools on day one moved into the Bowl competition and although no medals were on offer for them, the players put on an exhilarating competition for the spectators.
Canada had begun proceedings on day two against India and a hat-trick from Hirayama helped them through to the semi final. The home crowd were delighted, however, when Puneeth Krishnamurthy and Rohaan Sethna scored the host's points, whilst Wakabi scored two tries for Uganda in their 26-14 victory over Malaysia.
PNG earlier defeated Sri Lanka 26-12 with Levi adding to his tournament try tally with two more against the Asian side, before Tonga scored three times against Guyana to secure their position in the semi finals.
Day two results:
Gold medal match: New Zealand 24-17 Australia
Bronze medal match: England 14-17 South Africa
Plate final: Samoa 34-0 Scotland
Bowl final: Canada 10-17 Papua New Guinea
Medal semi final: Australia 17-7 South Africa
Medal semi final: New Zealand 33-12 England
Plate semi final: Kenya 17-22 Scotland
Plate semi final: Wales 12-38 Samoa
Bowl semi final: Tonga 5-24 Papua New Guinea
Bowl semi final: Canada 22-17 Uganda
Medal quarter final: South Africa 7-5 Scotland
Medal quarter final: Kenya 5-27 Australia
Medal quarter final: England 7-5 Samoa
Medal quarter final: New Zealand 33-10 Wales
Bowl quarter final: Tonga 21-14 Guyana
Bowl quarter final: Papua New Guinea 26-12 Sri Lanka
Bowl quarter final: Uganda 26-14 Malaysia
Bowl quarter final: Canada 43-10 India
With thanks to the International Rugby Board via their official site at IRB.com