The 15-year-old broke the world record of 56.44 she had set in Sunday’s semi-finals.
Australian Jessicah Schipper was second in 56.23 and China’s Jiao Liuyang was third in 56.86.
With her semi-final swim, Sjöström had eclipsed the nine-year-old world record set by Inge de Bruijn of the Netherlands on September 17, 2000 at the Sydney Olympics.
De Bruijn’s mark was one of only two women’s records still on the books that dated back to before 2006.
“I’m so happy, I can’t believe what’s happened, it’s going to take a few days for this to sink in and realize what I’ve actually done,” said Sjöström, who has slashed two seconds off her personal best in the last two days.
“It’s awesome. I can’t understand what’s happened, it’s completely crazy and I’m really happy.”
Sjöström’s performance on Sunday was the first of what has already become an avalanche of world records at the 2009 World Championships, the last world meet before the latest generation of high-tech swimsuits is banned in 2010.
Regardless of suits, this has been a meteoric rise for the 15-year-old who only two years ago considered quitting the sport.
Back then her best time was around 1min 02sec, a long way off the time she achieved here in Rome.
“When I was 13 I started to think it was a little boring but then I started to get huge improvements in my times when racing and it became more fun, so I decided to carry on,” she added.
Schipper was delighted with her finish and her time, having shaved 0.7sec off her personal best.
“It’s utterly amazing to be here and to be a part of this and see the old world record that stood for years be absolutely annihilated by most of the people in the race and for Sarah to be fastest is just amazing,” said the 22-year-old.
“It was such a fast swim and very exciting to be a part of that. It’s very inspiring, especially because Sarah’s so young.
“She’s got a long way to go and a lot of improving to do with age. I’m looking forward to racing her over the next couple of years, it’s going to be good.”