The powerful Kvitova backhand helped create two breaks points in a tense fifth game, but the gritty 21-year-old saved them both.
Osaka had three championship points as Kvitova served at 3-5, 0-40 in set two, but the Japanese was pegged back in sensational fashion inside Rod Laver Arena.
Kvitova, who will now be ranked No. 2, proved to herself that she can be the player she used to be and can contend for Grand Slam championships.
"I read notes before this but I still forgot the rest of what I was supposed to say", Osaka said with a laugh. And now, after winning the Australian Open and becoming world number 1, she is a superstar! It took me really while to believe, to the people around me again, and especially to the men, for sure.
She has now gone a step further to write her name in the history books as the first Asian to be crowned number one since computer rankings were introduced in 1975.
"I wanted to be back at my greatest level, probably as I played before", she said.
Kvitova can console herself with a career-best performance at Melbourne Park, where she did not drop a set on her way to the final.
"Honestly I wouldn't have wanted this to be our first match".
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It was also a performance from which Kvitova can draw enormous pride, considering her career nearly ended when she was the victim of a vicious home invasion in late 2016.
With a resilience forged in the strife-torn US Open final, Naomi Osaka clinched her second Grand Slam title at the Australian Open on Saturday, but this time there was no drama that could sour her triumph.
We learned the Japanese star she has the head and heart of a champion. This equals the 35 games played between Martina Navratilova and Chris Evert in the 1981 final, won by the former.
"I felt like I was in a state of shock through the entire trophy presentation", the 21-year-old said.
"Thank you for sticking with me even when we didn't know if I would able to hold a racquet again", Kvitova told her team, with her voice cracking.
"Congratulations to the 2x Grand Slam champion, @Naomi_Osaka!", she tweeted.
On what's been a wonderful comeback after being the victim of a knife attack two years ago, she added: 'It's hurting a lot today. But then nerves crept in, and Kvitova reeled off a dazzling string of points, saving the first match point with a crushing victor and then winning four more to save the game. "And, yeah, the third set was just one break".
So I was, like, practising with the hand, like, two, three times per day, which I don't know if the normal person will do that, but of course that I needed the hand to be back on the court.
"You are really unbelievable and I am really honoured to have played you in the final of grand slam".