Parry, who won his first national championship in 24 attempts, laid up on the par-5 18th rather than risk going for the green in two shots. He missed a birdie putt, but only had inches left for a tap-in to give him an 11-under total of 277 on The Australian course made soft by steady rain over much of the final day.
'I've worked pretty hard over my whole career, and this is the one I wanted,' said Parry, wiping tears from his eyes. 'I've been runner-up a few times, finished third, been up there on the leaderboard, but never won it.'
Parry, who played in Japan this year after a long career on the PGA Tour, was one stroke ahead of three players at 10 under -- American Brandt Snedeker (69) and Australians Lee Won-joon (66) and Nick O'Hern (70).
Snedeker called a penalty on himself with five holes to play when he tried to remove a leaf and his ball moved.
The 41-year-old Parry equaled The Australian course record of 64 -- held by Greg Norman and Steve Elkington -- on Friday.
James Nitties, overnight leader with Robert Allenby, had a chance of forcing a playoff but duffed his chip for an eagle at the last hole in torrential rain with thunder and lightning approaching the course.
Nitties (73) finished tied for fifth with Stuart Appleby (72), two strokes back of Parry. Allenby, who shot a final-round 75, was tied for 11th and four shots back.
Parry has 22 professional titles, including 12 in Australia, but the closest he came to winning the Australian Open was losing a playoff to American John Morse in 1990 -- on the same course.
Asked what he was going to do now, Parry jokingly said 'retire.'
'This has obviously meant a lot to me for a long time,' he said. '(In) '84 I was leading amateur and Tom Watson was the champion. I've been close a few times, runner-up a couple of times and top three about eight times and just could never get there.'
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.