Barty was made to work for it by unlikely finalist Collins and had to come from 5-1 down in the second set to prevail 6-3 7-6 (7-2) on Rod Laver Arena.
Collins had raced to within one game of taking the second set, only for Barty to rally back with a quite sensational fightback that ended with tie-break success to secure the trophy.
Collins said she was happy with her efforts against Barty and declared it a "fun battle".
"Not the result that I wanted obviously tonight, but I gave it my best effort," the American said. "I did everything that I could.
"I was pushed to the max, and I gave myself a chance there in the end. Unfortunately, it didn't go my way, but I did everything I could, and that's all you can do at the end of the day.
"It was a great event for me. [I] accomplished some new things, learned a lot of new things. I certainly have some areas to improve, which is a good thing. Yeah, [I] played against a great competitor tonight, and it was a fun battle."
Barty won in front of a passionate home crowd, and Collins explained where in particular she had struggled against her.
"I think she started to push me back in the court a little bit more," Collins added. "I was having some issues really being able to fully rotate on some of my shots to be able to get my shots to where I needed them to be.
"It was really unfortunate, but I did everything I could, tried to push through it. Fell short. She definitely came up with some great shots in some of those big moments, especially with her serving and pushing me back in the court."
The 28-year-old, who hit the same number of unforced errors as Barty (22), but only 17 winners to the Australian's 30, also had further words of gratitude for her mentor Marty Schneider, whom she also thanked along with her boyfriend in her post-match comments on court.
"We were joking about some tournaments that he had attended with me, 25K in Orlando where I did not have the best performance, and thinking about the way that I'm playing now versus then, it seems like a lifetime ago, but it really wasn't that long ago," she said.
"Other situations that I was in playing some of those smaller tournaments and facing challenges and bumps in the road and how I used to go about things and think about things, how clueless I was sometimes and how much I have learned and grown from those moments.
"Now we can kind of look back and laugh, but during those moments we had some tough conversations. Marty was always on call for all of those.
"I think we've shared some incredible memories over the years, but especially this week to see all of those baby steps come together now and being on the biggest stage in the world, it's just been so special."