Sabalenka was the pre-match favourite, having won 33 of her previous 34 matches on the Australian hard courts.
But Keys, a powerful baseliner, is one of the few players on the WTA Tour who has the weapons to damage Sabalenka.
A stunning opening set, where she whacked 11 winners and had a rock-solid first serve, set the platform.
Keys was also helped by a nervy start from Sabalenka, whose unstable second serve returned to trouble her.
Two double faults in the opening game allowed Keys to break, while another set up a second break point in the fifth game which Sabalenka handed over with a sliced forehand into the net.
Keys continued to play lights out, thumping clean winners from the back of the court and also showing deft touches.
A bemused Sabalenka could only smile when Keys pulled out an ice-cold drop-shot on the way to holding for 5-1.
However, Sabalenka was furious with herself after a fourth double fault handed over another set point – which Keys took with a backhand winner.
The exasperated Sabalenka, who had been demonstrative throughout the 35-minute set, decided she need to go off court to clear her head.
When she returned, there was a momentum shift.
Keys was unable to sustain her previous level, with her winners deteriorating and her first serve lacking precision.
While Sabalenka was still lacking fluency – illustrated by a long forehand that left her dropping her racquet in exasperation – she improved enough to dominate the second set.
A tight and tense decider did not produce a break point until the pivotal 12th game.
Keys upped the ante with some deep returning that Sabalenka could not handle, before sealing victory with a wonderful cross-court forehand winner.
